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UAW Local 95 ratifies pact with GM

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JAMES P. LEUTE
May 28, 2009
— The message that came out of the union hall on Wednesday was clear: United Auto Workers Local 95 members are concerned.

Concerned about their future as autoworkers. Concerned about the future of their employer, which is teetering on the edge of bankruptcy.


Those concerns led to Local 95's overwhelming ratification of modifications to a 2007 national contract. The UAW and General Motors reached agreement on the plan last week, and locals around the country cast ballots Wednesday and today.


"I could see it in their faces when they came in," said Local 95 President Andy Richardson. "You can tell when people aren't happy, but I could tell they were concerned, genuinely concerned."


Eighty-four percent of the approximately 750 Local 95 members who voted Wednesday approved the sweeping deal. About 1,200 members were eligible to vote, and Richardson said the results should send a strong message to Detroit about the local union's support.


Richardson said his Janesville brethren are in a different situation than locals casting ballots in other GM cities.


Their plant is closed, and there are no immediate plans to reopen it, he said.


But a provision in the new contract calls for GM to open an idled U.S. assembly plant for the production of small cars that the automaker isn't building anywhere else in the country.


That was topic of discussion at Local 95's two information sessions Wednesday.


"We told them we are going to go after that," Richardson said, adding that a local coalition trying to convince GM to stay in Janesville will reconvene next week with that goal in mind.


It's a long shot, Richardson admitted. But GM hasn't officially slammed the door on Janesville, and the prospect of a small car assembly operation offers hope to the workers at idled plants.


Richardson is unsure which GM plants could be in the running. Plants in Janesville and Moraine, Ohio, were idled last year and would make a short list. But GM has said it plans to close an additional 14 plants, a move that could extend the eligibility list for the small car assembly plant.


Richardson said the local coalition is ahead of everyone else in putting a solid plan before GM executives. And, so far, Local 95 is the only GM local that has ratified and scored 100 percent on the automaker's new competitive operating agreement.


The 4.8 million-square-foot Janesville plant also has adequate floor space to build the small cars and handle all of the in-sourcing demands outlined in the new contract, he said.


A provision in the new contract also calls for GM to use an idled stamping plant to support the small car assembly plant. Richardson doesn't believe the lack of an idle stamping plant near Janesville will hinder the local plant's chance to win the small car production contract.


"Our location in the supply chain has always been a rap on it, but there are plenty of other GM plants around the country that are just as far away from stamping plants," he said, noting the local coalition included plans for a Janesville stamping plant in its proposal to GM.


Richardson said other local contract concerns centered on rule changes for transfers to other GM plants and the length of time dislocated workers will get Supplemental Unemployment Benefits to complement or replace state unemployment benefits.


"Compared to other ratification votes we've had, people were more scared, more concerned this time," Richardson said. "There were times (Wednesday) when we had 500 people in the room and you could have heard a pin drop.


"We had their attention, and they were really paying attention."


CONTRACT HIGHLIGHTS

United Auto Workers officials on Tuesday unanimously endorsed a new cost-cutting labor agreement with General Motors. Members of Local 95 in Janesville ratified it Wednesday. Here are some highlights:


U.S. manufacturing

-- GM will build compact and small car assembly operations in the U.S. using one of its idled plants represented by the UAW.


-- GM agrees to reactivate three U.S. assembly plants and one stamping plant if sales exceed expectations.


Buyouts

-- GM will offer new buyouts to all UAW-represented employees under a program that will be presented to workers by Tuesday, June 9.


-- Workers with 20 years experience or more will be offered $115,000 in cash and a $25,000 vehicle voucher. Those who worked more than 10 years and fewer than 20 years will be offered $80,000 and a $25,000 vehicle voucher. Workers with less than 10 years will be offered $45,000 and a $25,000 vehicle voucher.


-- Employees will have 45 days to accept the buyouts following the rollout of the program.


UAW health care trust

-- The UAW-aligned health care trust—the Voluntary Employees Beneficiary Association—will receive half of the $20 billion debt GM owes the fund in the form of stock and new debt, instead of cash.


-- The VEBA will receive 17.5 percent of the common stock in a restructured automaker. The remaining GM stock will be allocated among other creditors of the company and the U.S. government.


-- The VEBA will receive $6.5 billion in preferred shares that pay a 9 percent cash dividend and a new $2.5 billion note. Cash payments under the note, including accrued interest, will be $1.38 billion payable in 2013, 2015 and 2017.


-- Retiree medical benefits will be cut with immediate effect at the insistence of the U.S. Treasury because of GM's "difficult financial situation."


-- Benefits for retirees could be cut further in 2010 and 2011 because of the "uncertainty regarding the long-term value of the GM stock" received by the VEBA.


-- UAW anticipates paying retiree health care benefits in 2010 and 2011 from cash, including the $585 million dividend from preferred stock. It does not expect to be able to sell GM stock until 2012 at the earliest.


—Source: UAW, Gazette wire services

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