UAW reveals details of contract with GM
The deal proposes cutting pay for some jobs by 50 percent.
DETROIT (AP) — General Motors Corp. will put $29.9 billion into a fund for retiree health care and guarantee that cars and trucks will be built at 16 U.S. plants as part of its tentative contract agreement with the United Auto Workers, according to a summary of the agreement released Friday by the union.
Dave Green, president of United Auto Workers Local 1714 in Lordstown, said the agreement preserves wages and health care for active workers “and we’ve done creative stuff that’s going to make the company profitable in North America.”
GM will pay an additional $5.4 billion to fund retiree health care while the UAW is setting up the health-care trust that it will manage. The formation of the trust, called a Voluntary Employees Beneficiary Association, or VEBA, was a major part of this year’s contract agreement. GM has around 340,000 retirees and spouses.
Under the tentative contract, 3,000 temporary workers will get permanent jobs at the full-time wage rate. There also is a moratorium on outsourcing.
Bonuses
The contract includes a $3,000 signing bonus and later annual bonuses equal to either 3 percent or 4 percent of wages. Base wage rates aren’t increased.
Hourly workers will get economic gains totaling $13,056 over the life of the four-year contract, the UAW said. But some workers will be getting less than before.
New hires who aren’t doing direct manufacturing jobs, such as groundskeepers, will make between $14 and $16 an hour, according to the summary. Manufacturing workers would make a starting wage of $28.12 under the new contract. There are 16,000 people doing noncore work in U.S. plants, the UAW said.
The tentative contract passed a hurdle earlier Friday when UAW officials from across the U.S. approved the pact.
UAW President Ron Gettelfinger said at a news conference that local union leaders will now take the pact to the 74,000-strong membership for a vote. He said the voting would wrap up and be counted by Oct. 10.
Gettelfinger called the guarantees on building cars and trucks at U.S. plants unprecedented and said he expects the tentative agreement to pass, although some members have concerns about its terms.
Gettelfinger also said the union had not yet picked the automaker — Ford Motor Co. or Chrysler LLC — that it would bargain next.
If the company’s UAW members ratify the deal, its provisions likely will save the company about $3 billion per year, which it can pump into the development of new products, according to several industry analysts.
GM will put $24.1 billion into the VEBA in January, although the fund won’t start covering retiree health care until two years later. GM will make up to 20 additional $165 million payments to the VEBA anytime the fund’s level is insufficient to provide benefits for at least 25 years.
GM will be required to pay interest on a $4.37 billion convertible note for the benefit of the VEBA, and the fund’s trustees will be able to convert that note to GM stock.