GM, UAW agree on new 4-year contract
Details weren't released, but the union said the deal reached late Friday includes some of its major goals, including improvements in profit-sharing, promises of new jobs and better health care benefits. The deal will serve as a template for contracts that still must be negotiated with Chrysler Group LLC and Ford Motor Co., setting the pay and benefits for 112,500 U.S. auto workers. It also will set the bar for pay and benefits at nonunion auto companies and other industries across the country.
The talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.
"When GM was struggling, our members shared in the sacrifice. Now that the company is posting profits again, our members want to share in the success," UAW Vice President Joe Ashton, the chief negotiator with GM, said in a statement.
The deal likely will include sweeter profit-sharing checks instead of raises for most of GM's 48,500 union workers in the U.S. Also likely is a raise for entry-level workers who make $14 to $16 per hour, about half the pay of a longtime auto worker. It also will include creative ways to cut GM's labor costs, which are still higher than those at nonunion U.S. plants owned by foreign competitors.
GM was the first of the Detroit Three to reach agreement with the UAW. Chrysler is likely to be next, followed by Ford, where little progress has been made in negotiations so far. The UAW announced the GM agreement just after 11 p.m. EDT Friday, after a little more than seven weeks of closed-door bargaining.
Workers must vote on the plan before it will take effect. Union leaders from factories around the country have been asked to come to Detroit Tuesday to learn the details so they can explain them to members. A vote is expected within 10 days.
"We used a creative problem solving approach to reach an agreement that addresses the needs of employees and positions our business for long-term success," said Cathy Clegg, GM's vice president of labor relations.
The union said in a statement that it successfully fought efforts by the company to weaken its defined-benefit pension plan, which is among the best in U.S. manufacturing. The company also wanted health care cuts, but the union protected those benefits and made improvements, the statement said. But it did not say if workers will see higher co-pays or monthly premiums.
Earlier this year, GM factory workers got profit-sharing checks that totaled around $4,000, and UAW President Bob King has said they'll have to be larger in a new contract if the union gives up annual pay raises.
GM workers reached early Saturday were happy a deal had been reached but anxious about the details.
At a factory complex in Spring Hill, Tenn., where GM used to make Saturns, worker Todd Horton was hoping the promise of new jobs would mean reopening the assembly plant where he worked before GM closed it in 2009.
Bobbi Marsh, a team leader in Lordstown, Ohio, near Cleveland, said it would be nice if she and other entry-level workers got a pay raise, but she's more concerned about job security. Marsh was hired in 2008 to help make the hot-selling Chevrolet Cruze compact car. She's worried that if sales slow, she could get bumped out of work by people with more seniority.
"If they want to throw us a dollar or two, I'm very excited," she said. "I really just need to keep my job. I can't even think past any of the other issues."
The union's contract with GM expired Wednesday, but it was extended indefinitely while negotiations continued. In the past, workers might have gone on strike when the deadline passed. But this year, GM and Chrysler workers had limited ability to strike under terms of the companies' government bailouts.
King, reached by phone Friday night, said he wouldn't comment until after he has met with local union leaders.
The White House will be among those watching the terms of the deal. GM received a $49.5 billion government bailout two years ago and is still part-owned by the U.S. Treasury. An agreement that is favorable to GM could help the company's stock rise, which would get the Treasury closer to making back the money it is owed when it sells its remaining shares.
Most GM workers make around $56 per hour in wages and benefits, less than at Ford but far higher than at other companies like Chrysler and Hyundai Motor Co.
After its wrenching trip through bankruptcy protection, GM is making money again. The company made $4.7 billion last year, its first annual profit since 2004. But it isn't eager to add costs after years of layoffs and plant closings.
The UAW has shown a willingness to work with GM to cut labor costs. Last fall, the union agreed to lower the wages of 40 percent of its workers at a Michigan plant so it can profitably build the subcompact Chevrolet Sonic there. In turn, GM has promised to invest in its U.S. workers and facilities.
The union hopes to show that it can work cooperatively with auto companies as it tries to unionize U.S. factories owned by Nissan Motor Co., Volkswagen AG and other foreign automakers. King said the union remains committed to organizing those plants.
"As long as unionized workers are being forced to compete with nonunion workers who in most cases receive lower pay and benefits — many in temporary jobs — there will continue to be a downward pressure on the wages and benefits of all auto workers," he said.
The union's focus on GM slowed the Chrysler negotiations and drew an angry response earlier in the week from CEO Sergio Marchionne.
Marchionne accused King of failing to show up at Chrysler's Auburn Hills, Michigan, headquarters to finalize a deal on Wednesday night. Marchionne then left the country, so it's unlikely a deal will be reached until he returns next week.
Talks at Chrysler will continue through the weekend. They'll resume Monday at Ford.