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October 4, 2007
Highlights and Lowlights of Tentative UAW-GM Contract
A week after they walked off the job in a nationwide strike that lasted two days, UAW members began to vote on the union's tentative contract with GM on Monday. If union members approve the contract, within the next four years the automaker could close as many as four more factories than it previously announced.
Ratification votes on the agreement between the United Auto Workers (UAW) union and General Motors, Corp. (GM) are expected to conclude by Wednesday, Oct. 10, according to the UAW. However, the UAW GM National Council — composed of presidents and bargaining chairs from more than 80 GM facilities across the nation — has voted to unanimously recommend ratification of the 2007 tentative agreement with GM.
If members of the UAW union approve a tentative contract that union leaders say will save jobs, within the next four years GM could close four more factories than it previously announced. Under the tentative contract reached, 15 plants either have no new products assigned to them or their main new work is “demand and business case dependent,” reports The Associated Press.
According to The New York Times:
An engine plant in Livonia, near Detroit, would close in 2010, according to the text of the contract, which U.A.W. members began to review over the weekend. Other plants vulnerable to being closed, according to the contract, are a small-engine plant in Parma, Ohio; a metal-stamping plant in Indianapolis; and a stamping plant in Flint, Mich.
Within four of the plants that could close, some 2,500 employees are facing an uncertain future. On the other hand, 3,000 temporary employees are to be made permanent. Many of the four factories’ workers are eligible to retire with full benefits, and the contract states that GM is to offer more buyouts, which would ease the process of cutting jobs. (Here's a list of plants facing an uncertain future pending the agreement.)
UAW rank-and-file members, however, aren’t entirely sure the tentative contract is the best possible. However, despite mixed feelings about the tentative agreement’s contents — it includes a controversial two-tier wage and benefit program and a plan to transfer the responsibility for retiree health care from GM to an independent trust — many workers and retirees said Monday they believed the membership would approve it.
UAW members began to vote on the union’s tentative contract with GM on Monday, just a week after they had walked off the job in a nationwide strike that lasted two days. More than half of the UAW’s 73,000 GM workers will need to vote in favor of the proposed deal at local union meetings, scheduled to occur by Oct. 10, to ratify the contract, reports The Detroit Free Press.
GM has been cutting costs aggressively in the face of stiff overseas competition. The automaker states that it cut $9 billion in structural costs on a running rate basis by the end of 2006 — $2 billion above the target noted last year, and $4 billion above the initial target. The company realized $6.8 billion of these savings in its 2006 financials, and plans to realize the full $9 billion in 2007.
Major actions included reducing its salaried and hourly workforce, revising U.S. salaried and hourly retiree health care benefits, restructuring its U.S. salaried employee pension plan, decreasing its executive and board of directors’ compensation, and aggressively pursuing structural-cost reductions throughout the company.
Perhaps the biggest bone of contention between the union and the automaker has been the issue of health care costs, especially for retirees. “Our retirees will be protected under this Voluntary Employee Beneficiary Association (VEBA),” UAW President Ron Gettelfinger said in a statement.
VEBAs serve as a trust fund, or “a method to provide employees supplemental benefits; particularly post-retirement medical savings accounts,” according to VEBA.org. What remains to be seen is how much money GM puts into the UAW’s VEBA and how the union rations out the health benefits for the members.
The UAW began selling its proposed new GM contract to its members. Here are the new highlights (via The Detroit Free Press):
Plant Security: 16 of 17 UAW-GM factories secure through contract;
Retiree Health: Retiree health care unchanged under GM through 2009; with almost $30 billion available, UAW projects lifetime benefits for all;
Worker Health Benefits: Active workers keep full health benefits, in exchange for cost-of-living diversion;
New Members: GM agrees to shift 3,000 temps into permanent positions; and
Two-Tier Wages: New hires get $14 to $15 per hour.
In the meantime, since UAW workers at GM had their strike and settled, the union laborers at Ford and Chrysler are not rubber-stamping the same terms.
“Union negotiators representing workers at Chrysler have signaled reluctance to tacitly approve an agreement that mirrors the tentative deal forged with General Motors Corp. last week,” The Wall St. Journal cites people familiar with the negotiations as having said. “At the same time, management officials at Ford and Chrysler have their own issues with such an agreement, said people familiar with those talks.”
Earlier: Follow-up: No Contract, Work
Resources
UAW Contract: Nuts and Bolts
by Katie Merx
Detroit Free Press, Sept. 29, 2007
G.M. Labor Accord Calls for More Plant Closings
by Nick Bunkley
The New York Times, Oct. 2, 2007
GM-UAW Deal Leaves 15 Plants with Uncertain Future
The Associated Press, Oct. 3, 2007
UAW GM National Council Unanimously Recommends Ratification of Proposed Contract
United Auto Workers, Sept. 28, 2007
General Motors 2006 Annual Report
UAW Faces Resistance to Deals at Ford, Chrysler
by John D. Stoll and Jeffrey McCracken
The Wall St. Journal, Oct. 2, 2007
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5 CommentsI understand the need to cut cost and streamline opertions. I believe most union employees do also. The thing that gets most employees is the inability of corporate management to share in the burden. No where in the article do you mention the shared burden from GM or Union leadership. They should share proportionately with the employees but unfortunately both will be handsomely rewarded by cutting the very thing that has made US companies great, their loyal employees.
Someday companies in this country will realize that the most important asset they have is their employees, not management,not stockholder and especially not the government. Right now they view emplouees as expense items to be used and tossed aside at their descretion, not the asset they really are. Sad state of affairs for our country. Long term our economy and country will pay for this arrogance.
October 5, 2007 1:26 PMThat bites; I use to work for GM in Atlanta, both plants.
October 5, 2007 4:29 PMTo MPS: When will you understand that the American public outside of the US auto industry is feed-up with the whinning poor auto worker?. If you are such an asset, and it might be of value to you to look up the definition of asset, why does the union and management place blame for all the troubles on the mutually agreed upon maintenance of that asset over time..."health and pensions of retired assets [workers]. Here is a group whose pay has long been, as compared with the pay of others in industry, many times what it is worth from both a skill level and a
difficulty level. If sharing the burden is important to you, how about the union, hourly worker sharing the burden with the group that truly allows him to have a job....the share holders? The average worker has no monetary investment in the company...his paycheck comes each pay period wheather a profit was realized or not. Let's really share...take a pay cut when the stock drops, take a pay cut when production lines shut down and you continue to draw your hourly rate while sitting on your ass, even if there are other things to be done in the faciltiy because of contract work rules, take a pay cut when production has to be re-worked because of quality issues. I don't think you really want to share the burden...you just want to complain and point out the bad guys, the enemy, management and the stock holders. It seems to me that as a group autoworks couldn't manage a company....if managment of their on lives is an example, my point is proven. Few have enough confidence in their value [asset] to the compny to invest as a stock holder, unless the stock was a near gift as part of their compensation. If your were nearly the asset you hold out yourselves to be, you would be wise enough to realize that without sharholders and the continued influx of capital for a piece of paper that may or may not entitle you to a few cents on the dollar you have invested quarterly and hopefully at a time in the future will have a face value greater than its cost, there would be no GM. The sale of GM's hard assets at todays market would not cover their debt...capital influx is what keeps the ship afloat and your greedy back side being paid, compared to other industrial workers in the US and abroad, more than it is worth.
Jannet Ison...... You must have nothing better to do but worry about someone else....... UAW employees work harder than most people realize and work around acids, sulfates with affect them in later years.
October 17, 2007 5:17 PM"UAW employees work harder than most people realize and work around acids, sulfates with affect them in later years"
My Dad worked for GM, he now has leukemia which was likely caused by being around benzene.
People don't realize how difficult the work in those plants are. Try installing 600 gas tanks in a day and tell me what a bunch of whiners the workers there are... With that said I will say that the people on the assembly lines are paid a LOT more than the average factory worker in this country. That doesn't mean I think they are paid more than they deserve, but unfortunately, the "GLOBAL" free market will not support those wages ... that is the scary thing... what will the global market support? That is the question. It appears to me that the only way global trade works for US citizens is to better manage our trade treaties because what we are doing now with these free trade deals is losing our manufacturing base ... a country without a manufacturing base is what you call BANKRUPT.
The people who whine about worker wages are those who are jealous... but they don't have much to be jealous of anymore since the wages and benefits are being cut... no more pentions or retiree health care for new workers and the old people are leaving fast with buyouts and retirements.
The problem is that those auto jobs set the standard for the rest of us... holidays, vacations, even weekends and overtime pay. People take these things for granted but it was the unions, and namely auto workers... who brought a lot of these things to average workers.
Once the fat cats are done hacking up autoworkers pay and benefits, your pay and benefits may be next. Do you call this progress? Our country appears to be going backwards.
June 3, 2008 9:41 AM
