UAW Says Deal With GM Creates Or Keeps 6,400 Jobs

Teni Sow | September 20, 2011 | 0 Comments

DETROIT — A new four-year contract deal between the United Auto Workers and General Motors Co. will add or keep 6,400 jobs in the U.S. with a $2.5 billion investment, the union said Tuesday.

Most workers won’t get annual pay raises, but will get at least $12,500 in bonuses, profit-sharing and other payments over the life of the contract.

Union leaders from around the country were briefed on the deal in Detroit in a morning meeting, and they voted to recommend that GM’s 48,500 factory workers ratify it. Workers are expected to finish voting on the deal by next Thursday.

The union will now use the GM contract as a template as they negotiate with Chrysler Group LLC and Ford Motor Co.

The deal creates more than 5,100 new assembly-line jobs and opens up 1,300 jobs for skilled workers like electricians and welders. The skilled work is now done by outside contractors, but UAW workers will now be able to bid on it. The union said much of the work is being brought back from Mexico.

“The auto industry is back. General Motors and the UAW are working together to create jobs in America,” UAW President Bob King said at a meeting of local union leaders in Detroit.

GM has agreed to invest in its factories, including the reopening of an assembly plant in Spring Hill, Tenn. Union-company teams also are identifying 760 more potential jobs and 1,400 more jobs for UAW-represented GM suppliers.

The Spring Hill plant will make two midsize cars, according to a summary of the agreement released by the UAW. GM will invest $61 million for one of the cars and add 600 jobs, while it will spend $358 million on the other car with 1,100 jobs created.

Other factories scheduled to get new work under the deal include:

_ Wentzville, Mo.: Gets additional shift plus a midsize pickup truck. A $380 million investment and 1,850 new jobs.

_ Warren, Mich.: Transmission plant near Detroit gets new transmission. A $325 million investment and 360 new jobs.

_ Romulus, Mich.: Engine plant near Detroit gets $385 million investment and 285 jobs.

_ Saginaw, Mich: Casting plant gets $215 million investment and 255 jobs.

_ Fort Wayne, Ind.: Truck assembly plant gets next-generation pickups, with a $230 million investment and 150 jobs created or retained.

In addition, GM will build a new compact car at a factory that’s yet to be determined. It will create more than 500 jobs with a $150 million investment.

GM’s assembly plant in Shreveport, La., will close as scheduled, while a plant in Janesville, Wis., will remain idled.

The agreement reached Friday includes a $5,000 signing bonus, but has no annual pay raises for most workers. However, in addition to the signing bonus, they’ll get a minimum of $3,500 in profit-sharing next year and $250 per year for meeting quality targets. They’ll also get three $1,000 bonuses.

The contract includes a new profit-sharing formula that is based on the company’s North American profits. If GM earns less than $1.25 billion, workers won’t get any payment.

Some of GM’s 1,940 entry-level workers will get $3.50-per-hour pay raises, to $19.28 per hour. The raises are based on seniority. Now they make from $14 to $16 per hour, about half the pay of a longtime UAW worker.

The union also said GM is offering payments for workers to retire early or leave the company. Eligible workers can get up to $10,000 if they retire within the next two years. There’s also a $65,000 bonus for skilled-trades workers if they retire or leave the company between Nov. 1 and March 31. GM is trying to clear out older workers and cut its labor costs by hiring new workers at the entry-level wage.

King said he hasn’t decided if the union will start talks with Chrysler and Ford next. He also would not talk about an angry letter sent last week by Chrysler CEO Sergio Marchionne accusing King of missing a meeting to sign a new deal.

“We have a great relationship with Chrysler, with Sergio, with all the Chrysler management,” King said. “We’re working together, as we did here, to create more jobs.”

Marchionne was on his way back to the U.S. from Europe on Tuesday and may take part in the talks.

General Motors Co. shares fell 31 cents, or 1.3 percent, to $22.74 in afternoon trading.

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