UAW Says GM Workers Ratify Labor Contract By 2-to-1 Margin

By David Phillips

Sep. 28, 2011

The United Auto Workers has ratified a four-year labor agreement with General Motors Co. by a 2-to-1 margin, marking another milestone in the automaker’s post-bankruptcy restructuring.

The union, in a statement, said the vote was 65 percent in favor of the agreement among production workers. Among skilled-trades workers who voted, 63 percent approved the deal, the UAW said.

The union reached a tentative agreement with GM on Sept. 16.

GM is the first of Detroit’s three automakers to negotiate a settlement with the union. The UAW is now engaged in final talks to secure a labor accord with Ford Motor Co. The union’s contract with Chrysler has been extended through Oct. 19.

Under the pact, GM’s 48,000 hourly workers have traded the promise of generous pay and benefits for job security and compensation gains that are more closely tied to the automaker’s health, profitability and quality advances.

“The UAW and GM entered into this set of bargaining as America struggles with record levels of unemployment and an economy that shows little sign of improvement,” UAW President Bob King said in statement.

“Because of President Obama’s and the American taxpayers’ backing of our jobs and our companies, we were determined to work together with GM management to grow jobs in the U.S. and to get more Americans back to work and we are doing just that.”

The GM deal provides workers with a $5,000 signing bonus for approving the pact, $1,000 lump sum “inflation protection” payments in 2012, 2013 and 2014, a richer profit-sharing program and the promise of 6,400 retained or new jobs.

GM also agreed to reopen an idled assembly plant in Spring Hill, Tennessee, as part of $2.5 billion in product and plant investments earmarked for the United States.

In return, GM’s hourly workers are forgoing cost-of-living increases that have been a way of life for Detroit’s auto workers until the last decade. GM’s highest-paid hourly workers are also eligible for buyouts of $10,000 or $75,000 to retire.

The union says as many as 14,000 to 17,000 GM workers are eligible to retire, clearing the way for the automaker to hire additional entry-level workers, who earn far less but will receive a hike in pay and enhanced health insurance.

Some analysts believe the deal will increase GM’s overall labor costs by less than 1 percent over the life of the contract. And GM’s break-even point in North America will remain essentially unchanged, people familiar with the matter have told the Wall Street Journal.

GM’s labor costs could actually fall if enough veteran workers leave and the automaker hires enough lower-paid workers to replace them, analysts say.

David Phillips writes for Automotive News, a sister publication of Workforce Management. To comment, e-mail

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