A tentative contract between General Motors Co. and the United Auto Workers would create more than 6,000 U.S. jobs and add profit-sharing for workers, union officials said Tuesday, but the proposed deal also holds the line on pension increases for retired members.
GM workers are expected to complete a ratification vote next week, officials said.
“Both sides got a lot of what they wanted, but not everything,” said Art Schwartz, a former GM labor official and now president of consultancy Labor and Economic Associates in Ann Arbor, Mich.
“From the company’s perspective, they mostly kind of held on and changed the game from fixed increases to lump sums,” Schwartz said. “That’s something they wanted to do, and they were able to accomplish that.”
Given the uncertain current economy, the union could not sweeten the pensions of workers who have retired or will retire, said UAW President Bob King, but it does accomplish other union objectives.
“We used to have four or five active workers for every retiree,” he said. “Now we have about 10 retirees for every active worker.”
The agreement includes a $5,000 signing bonus due upon ratification by 48,000 GM workers. In addition, workers will receive a $1,000 lump-sum payment each year, starting in 2012, to cover cost of living increases, plus an annual bonus of $250 if certain quality targets are met.
While maintaining the wage freeze for senior workers, the tentative agreement increases the wages of first-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,” King said. However, the wages of long-term GM employees will remain frozen at the 2007 level of $29 per hour, on average.
The contract also includes retirement incentives for long-term employees. Eligible production workers will receive $10,000 if they retire, while skilled trades personnel are eligible for $65,000 in retirement incentives.
Some 17,000 GM workers are eligible for the incentives, but it isn’t clear how many might take the offer.
Most of the long-term employees have spurned several earlier retirement offers and have remained on the job because they are putting children or spouses through college or helping support relatives who have lost or can’t find a job.
Joe Ashton, the union’s top negotiator with GM, said the automaker also has agreed to reopen a Tennessee assembly plant that was closed during GM’s 2009 bankruptcy.
“Workers should start returning to the Spring Hill plant next year,” Ashton said.
King 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.
Reuters contributed.
