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A new United Auto Workers contract with General Motors Co. will provide union workers with a guaranteed $8,000 in added pay over the life of the four-year deal, and could mean more work for several of the automaker's plants, including those in Toledo and Defiance.
Workers would get a minimum $3,500 next year in profit sharing if GM's current pace of profitability continues through the end of the year. Plus, raises are to go to the entry-level workers who now make about half the wages of veteran workers. And the company will attempt to keep costs down by offering buyouts up to $65,000 to older workers and replacing them with employees at lower wages.
The tentative contract, which was reached Friday, will add or keep 6,400 jobs at six U.S. plants by diverting 1,725 production jobs slated for plants in Mexico back to U.S. plants and creating an additional 4,675 jobs from $2.5 billion in investments by the automaker.
GM and the union also agreed to examine ways to bring 760 "opportunities" now at foreign plants back to the United States. One of those items is additional casting work at the Defiance foundry. However, GM declined to comment about that, and UAW officials from Defiance were not available for comment yesterday.
Ray Wood, president of UAW Local 14, which represents about 1,500 active and laid-off workers at GM's Toledo Powertrain plant, said the contract doesn't identify specific new work or potential work for his plant, but he said getting it is possible.
"We do not believe we're done in Toledo with future products," he said. "We think the sky's the limit here."
Details of the contract were made public yesterday in Detroit during a news conference featuring UAW President Bob King and Joe Ashton, union vice president in charge of dealings with GM. UAW leaders from around the country were also briefed on the deal and voted to recommend ratification to GM's 48,500 workers. Voting on the deal is expected to be completed by Sept. 30.
Toledo Powertrain is to hold informational meetings tomorrow and vote on the contract on Sunday.
It was not known when Defiance Powertrain workers are to vote.
Mr. King said yesterday, "This tentative contract provides jobs for UAW members who have been laid off over the last several years, creates thousands and thousands of new jobs for communities in desperate need of work, and brings production back to the United States that had been moved to Mexico and other parts of the world." The contract terms, he said, likely will serve as a pattern for negotiations with Chrysler Group LLC and Ford Motor Co., as has been typical in past contract talks after the first automaker agrees to terms.
The deal includes a $5,000 signing bonus and three $1,000 inflation-protection lump sums to be distributed in 2012, 2013, and 2014.
The new profit-sharing formula is based on GM's North American profits. If GM earns less than $1.25 billion, workers get nothing. But in 2010, GM earned just under $5.7 billion in North America, which would equal a $5,500 profit-sharing check under the new formula. Under the existing formula workers got $4,300.
Wages for 1,940 entry-level workers, who now make $15.78 an hour, will rise to $19.28 by the end of the contract.
The union said eligible workers who retire in the next two years will get a $10,000 bonus, while eligible skilled-trades workers who retire or leave between Nov. 1 and March 31 can get an additional $65,000 bonus.
Mr. Wood of Local 14 would not predict what how membership would vote, but conceded that some members may not like some terms of the agreement. Still, he said, "from my perspective, I always have complete confidence in the negotiating team and what they do. I'm sure they did their absolute best."
At the news conference, Mr. Ashton said, "The basic that we went into this agreement looking for was jobs, jobs, jobs."
The creation of 6,400 jobs over the next two years is a key provision, he said. "Quite a few of those jobs were in Mexico," he added.
Mr. King said the union worked with GM to find ways to cut health care costs. It adjusted coverage to provide workers with unlimited $25 office visits to the doctor, annual physicals, and no increases in prescription drug costs.
"We're proud of what we did with health care. The unlimited $25 doctor visits, we think that's a great thing for members and their families," he said. "We also think that in the long term, workers will be healthier, and that will reduce health-care costs at General Motors."
Contact Jon Chavez at: email@example.com or 419-724-6128.