The new GM contract will bring the reopening of the shuttered Spring Hill, TN plant -- and the addition of over 6,000 jobs.
General Motors Co. is obligated to reopen its assembly plant in Spring Hill, Tenn. under the terms of its tentative new labor agreement with the United Auto Workers Union.
Union officials also said Tuesday they expect the new four-year GM contract — which is worth $12,000 per employee over the life of the agreement — will serve as the pattern for new labor pacts with both Chrysler Group and Ford Motor Co. But which of those makers will be targeted next remains uncertain.
“In these uncertain economic times for American workers and faced with the globalization of the economy, the UAW approached these negotiations with new strategies and fought for and achieved some of our major goals for our members, “ said UAW president Bob King after the agreement was endorsed unanimously by the union’s GM council.
The agreement includes a $5,000 signing bonus due upon ratification by 48,000 GM worker s. In addition, workers will receive a $1,000 lump sum payment, each year starting in 2012 to cover any increase in the cost of living — and an annual bonus of $250 bonus if certain quality targets are met.
The profit sharing for all blue-collar workers is expected to reach $3,500 this year and could total as much as $20,000 over the life of the agreement if GM continues to generate substantial profits through 2015, King said.
Based on the revised profit-sharing formula workers would have received $5,000 based on GM’s 2010 earnings, about $700 than the actual payout.
In addition, while maintaining the wage freeze for senior workers, the tentative agreement increases the wages of second-tier workers in annual increments from $14.78 per hour to $18.28 per hour in the final year of the contract.
“We’re proud of what we did for the entry-level wage,” said King, who had identified raising the pay of entr- level workers as one of the union’s top objectives during the negotiations.
However, for the first time in a generation, the tentative agreement between the auto union and GM did not include improvements ins pensions. The union concluded pension increases were off the table because GM’s pension fund was left underfunded by the financial collapse of 2008 and downward pressure in the stock market, union officials said.
Joe Ashton, the union’s top negotiator with GM, said the agreement adds some 6,400 jobs over the next four years, including several hundred that GM had planned to add in Mexico. In addition, GM has agreed to re-open an abandoned Saturn assembly plant that was closed during the carmaker’s 2009 bankruptcy.
“Workers should start returning to the Spring Hill plant next year,” said Ashton, who said GM wasn’t prepared to release the details of the new mid-sized models that will be assembled at the plant.
“I’m really proud of our position. We focused on creating jobs for America. There is nowhere else in manufacturing in America creating good paying jobs other than the auto industry,” King added. “We’re bringing back a lot of work back that would have left this country.”
King also said the union will decide in the next day or two whether to negotiate next with Chrysler or Ford. The union could decide to bypass Chrysler for now, he said. The two sides appeared to be close to an agreement several days before the GM settlement was hammered out but the deal was scuttled by an unknown snag that left Chrysler CEO Sergio Marchionne fuming.
The UAW now hopes to use the GM settlement to craft a pattern for Ford and Chrysler, as it has done in the past. That’s counter to initial observer expectations that this year could bring significant differences in the contracts at each of the Big Three Detroit makers.
“The outer skin will be different, but the principles will be the same,” forecast Harley Shaiken, a labor professor at the University of California – Berkeley.
Shaiken said he would not be surprised to see some significant opposition raised by UAW members during the 10-day ratification process but anticipates the GM agreement will ultimately be approved. Meanwhile, he believes the new settlement at GM could deliver the momentum the UAW needs to finally start organizing the “transplant” assembly lines operated by foreign makers like Toyota, Volkswagen and Hyundai.
The agreement shows workers at the transplants that the UAW can make gains while still helping a carmaker like GM improve its own financial situation, said Shaiken, adding, “This is the moment and this is the leadership that can make it happen.”
Paul A. Eisenstein contributed to this report.
After reading the high lights it look like the retirees didn’t get anything.
Maybe I’ve just misread this, but what were the pension improvements? It is stated that pensions were off the table, and yet they were improved. What gives? Even if I don’t get much in pension gains, I’m thrilled with what I have read so far as per the agreement. There’s always the fine print though. Good for the active workers!
“However, for the first time in a generation, the tentative agreement between the auto union and GM included new improvement ins pensions. The union concluded pension increases were off the table because GM’s pension fund was left underfunded by the financial collapse of 2008 and downward pressure in the stock market, union officials said.”
Excuse me for posting twice, but I think the correct wording should have been “did not include an improvement in pensions.” And after checking the contract in its entirety on UAW.org, there was no mention of any improvements for retirees. We gave up the right to vote on proposed contracts when we retired. Perhaps the UAW will be pressuring GM to fully fund the pension fund now; that would satisfy me, at least until 2015. I certainly hope the proposed buyouts will not be coming out of the pension fund and further deteriorate our pension security. I was talking to an active guy on the cusp of retirement earlier today, and he’s not very impressed with the buyouts; he noted that retirees were virtually ignored, and has decided to keep working.
I will further check and advise. The original news from the union announcement was that they would receive some improvements.
Paul E.
Well, our mistake. Just got clarification from Joe Szczesny. No pension improvements, though the company IS looking to increase funding. Will revise story.
I for one,am very upset over the new contract.I worked for GM for 40 years,before I retired in 2005 GM and the UAW have turned there back on the retired,just as our Government has turned there back on senior citizens.
How can the UAW go along with a 5.000 signing bonus,1.000 quality bonus, and profit sharing checks in excess of 3.500.00 for active workers making good money already, and not come up with something to make life a little easier for GM people living on a fixed income?
The UAW should have taken the 5.000 bonus money,and used it to fund the dental, and vision plans for us retired.I guess the NEW GM. and the NEW UAW could care less about those of us that sacrafised to make things better for the new GM
I quit paying my 2.00 union dues,and would suggest others do the same. I will never buy another GM car as long as I live. Let the active workers buy the GNM cars, they have all the money
pmorris1 I can agree with you on most of what you say. I would have loved to have got the $25.00 co pay for office visit to the doctor. Right now it cost my wife and I $115.00 every time one of us goes to the doctor when you get to be a senior you go to the doctor a lot more. It’s not like we can go into the plant and work some overtime when we need extra money. Fix income is fixed and to make matter worse for those of us already drawing our SS we haven’t had a cost of living raise in it for a few years but to say you’re not going to buy another GM car and stopped paying your dues is just wrong. GM still pays us a good retirement. You more than me because I retired in 2000, and we still have very good insurance although it’s not like it used to be. We still need to support GM and help keep the Company strong so we can continue getting what we do with a chance of more later. Although I would have liked to have got more in this contract, I still conceder myself very lucky. When I look around now and see so many out of work and have lost their homes. So many that wasn’t as fortunate as us to have such a good job that paid good, had great benefits and a union to protect us and help protect our benefits and retirement. We came so close to losing so much had McCain been elected instead of Obama. So just keep in mind that we are so much better off than millions of other right now.
I have to say I understand the concerns about not getting more for pensioners but one also has to understand that GM simply wasn’t going to go there. End of story. And without a strike clause there was little leverage for the UAW. Considering the union’s position as it went into the talks I actually think bargainers came out well ahead of where they were earlier, probably getting more than most of us had anticipated, so while some, like pmorris, have reason to be disappointed I think they need reflect on the realities of the bargaining situation. Meanwhile, GM V. Chairman Steve Girsky has indicated plans to start adding cash to the very underfunded pension program, which may have been a side agreement during the talks. That, if so, is something that should not be downplayed.
Paul A. Eisenstein
Publisher, TheDetroitBureau.com
You have a work force in place,employees making good wages,many working all kinds of overtime,as is the plant in Delta Township,outside lansing.Why in the world would you bargin for a $5.000 signing bonus for these folks. We have all made sacrfices to help GM prosper. If GM can’t afford to give back our dental, and vision, how can they afford to pay out $5.000 bonus to employees that all ready should be thankful to have a job. It’s not like we are paying signing bonus’s to incoming Detroit Lions players.At the very least GM should take that money an just put it into our underfunded pension program. There are thousands of us retired GM workers out here that buy a lot of GM cars,GM better remember that when they go out of there way to ignor us. Did it ever cross anyones mind that maybe that is why so many so called good americans are out there spending there GM paychecks, and oh yes Bonus checks buying cars with forign name plates, and then complain about the loss of jobs in america
Hi, I’m hoping you caught the item we posted today on GM and Chrysler retiree benefits, at
http://www.thedetroitbureau.com/2011/09/gm-chrysler-retirees-to-regain-some-key-benefits/
Paul E.
I think, pmorris, you need to check with a union benefits person so as to update yourself on certain of your UAW benefits and who is responsible. GM is no longer responsible for retiree healthcare, which would include dental and vision. The UAW healthcare trust, the VEBA, is the responsible entity. The VEBA, at least at first, was not judged stable enough to fund dental and vision. However, as of tonight, it is reported in the Detroit newspapers that we retirees will be getting preventative parts of our dental and vision back. The trustees of our VEBA has judged that it is healthy enough to support this action. Patience, sir. The UAW will enhance these benefits as soon as the stock used to fund this VEBA gains value and is sold. As for our pension fund, I do believe GM is responsible for making additional contributions at given times, and I’m sure our union was thinking of this as they sought to enhance GMs profitability in the latest contract. You sir should take it upon yourself to realize that the old days are over, that we retirees are as much dependent on a viable, profitable GM as are active workers and stockholders. Patience is a virtue now, and I for one do not have a problem with our active employees right now, because a great number of them are actually not making as much in wages and benefits while working as we retirees are in our non-working retirement years. Those active folks are our lifeline right now, and they need to be making the best product possible at a good wage. As I said, you really need to have a sit-down with a benefits person.