GM and UAW Reach Tentative Contract Agreement, Epic High-Five Looms?

By Jason Davis | September 19, 2011
GM workers received positive news over the weekend as reports from UAW indicate the union has reached agreement with General Motors for a new labor contract. Details of the proposed contract have not been disclosed, but according to leaked information, GM has agreed to offer a $5000 signing bonus and $2- to $3-an hour pay increase to eligible, hourly employees. That bump would net entry-level laborers, or the "second tier," about $16-19 per hour, not including benefits. "This is a contract that shows considerable gains in a dismal economic context," said Harley Shaiken, a labor professor at the University of California at Berkeley, to The Detroit News. "There is always opposition to a contract, but it is my sense that this will have support."
Under the agreement, GM will also reopen several shuttered U.S. manufacturing plants, and has agreed to transfer jobs from overseas back to the U.S. The plants include the former Saturn factory in Spring Hill, Tennessee, and possibly others in Warren, Romulus, and Wentzville, Missouri. The UAW’s chief bargaining team will meet with GM on Tuesday in Detroit to detail terms of the proposed deal, which many industry insiders believe could be a precursor for deals with Chrysler and Ford. Local unions are then expected to ratify the deal in seven to ten days. "There are new jobs and more money," Kristin Dziczek, a labor expert at the Center for Automotive Research in Ann Arbor, Michigan, told The Detroit News. "There are not concessions and job loss. What's not to like?" While UAW leaders expect rank-and-file ratification, others are less certain of the UAW's gains. Jose Facundo, a worker at GM's Lansing Delta Township plant, expressed disappointment to The Detroit News about the $5000 signing bonus. "It was kind of a shock. We thought we'd get more." The proposed deal includes a greater slice of the profit for many workers. Though most of the details have not been released, it is suspected that eligible workers would receive $1000 for every $1 billion in GM's North American profits. From August 2010, GM has earned more than $5.7 billion. Facundo notes that the signing bonus doesn't compare to what workers have given up since 2008, including pay raises and cost-of-living increases. For this, and other pay issues, Facundo suspects that many will vote "no" on the new deal. Joe Leller, a worker at Ford's Dearborn Plant, told The Detroit News that many of his co-workers are also less than thrilled with the UAW's GM deal. Because Ford didn't take bailout money from the Federal Government in 2008, its workers can threaten to strike should their contract demands go unmet. GM's workers do not have that option, as stipulated in the bailout contract extension. Sources: GM, UAW, The Detroit News