"GM, UAW agree on profit-sharing in new contract" What do you think of this news story?

XENON23 2011/09/19 10:22:44
"The United Auto Workers union won $5,000 signing bonuses and the possibility of sweeter profit-sharing checks as part of a new four-year contract with General Motors Co., two people briefed on the talks said Saturday.

The deal, which was reached late Friday, also includes a $2- to $3-per-hour pay raise for entry-level workers over the life of the contract and guarantees more union jobs, the people said.

Both persons asked to remain anonymous because the details of the contract haven't been reviewed by all local union leaders.

The GM deal will serve as a template for contracts that still must be negotiated with Chrysler Group LLC and Ford Motor Co. It would set the pay and benefits for 112,500 U.S. auto workers. It also sets the bar for pay and benefits at nonunion auto companies and other industries across the country.

The contract is the first since GM and Chrysler received government bailouts to make it through bankruptcy protection in 2009. GM earned $4.7 billion last year.

Workers have to approve the deal before it can take effect. A vote is expected within 10 days.

In addition to the bonuses, workers could get profit-sharing checks that exceed the $4,000 that workers earned last year.

The deal also will include creative ways to cut GM's hourly labor costs. GM pays around $56 per hour including wages and benefits, which is less than what Ford pays but far higher than other companies like Chrysler and Hyundai Motor Co.

Also, a former Saturn assembly plant in Spring Hill, Tenn., will be reopened under the deal, the people said, and new products have been promised to plants in Romulus, Mich.; Warren, Mich.; and Wentzville, Mo. A plant in Janesville, Wis., which stopped producing trucks in 2009, will remain idled but won't close.

Kristin Dziczek, head of the labor and industry group at the Ann Arbor, Mich.-based Center for Automotive Research, said the agreement is a good compromise. It ensures that GM's overall labor costs will fall over the lifetime of the contract, since new hires will be making significantly lower wages than most current workers. But current workers will get economic gains in the form of profit-sharing checks and bonuses.

"They get the preservation of everything they have and money in their pocket," she said.

GM was the first of the Detroit Three to reach agreement with the UAW. Chrysler negotiators were talking all weekend. Little progress has been made in negotiations so far at Ford.

The UAW announced the GM agreement just after 11 p.m. Friday, after a little more than seven weeks of closed-door bargaining.

GM workers reached early Saturday were happy a deal had been reached but anxious about the details.

Bobbi Marsh, a worker in Lordstown, Ohio, near Cleveland who is paid the entry-level wage, said a raise would be nice, 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."

GM has about 2,400 entry-level workers who make $14 to $16 per hour, about half the pay of a longtime UAW worker. The union agreed to the lower wage as Detroit automakers ran into financial troubles in 2007.

GM's contract with the union expired Wednesday, but it was extended 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 government bailouts.

The union hoped 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 in a statement.

Also watching closely is the White House. 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."

Read More: http://finance.yahoo.com/news/GM-UAW-agree-on-prof...

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  • Ken 2011/09/20 02:41:45
    I wish these SOBs would go bankupt as they should have long ago.
  • Spider20 2011/09/19 18:35:36
    1) Shouldn't ALL the bailout/loan money be repaid BEFORE we start saying GM is making a profit, before we start paying out bonuses to ANY employee, white and blue collar?

    2) I'm not anti-union....wasn't it gross abuse by management/ownership that led (in part if not completely) to the necessity of the union in the first place? I worked part time at UPS in the late 70's and early 80's, and I can tell you that management then was always trying to pull some kind of crap on the workers, especially the part timers.......but I agree unions and management need to work together to make these companies better all the way around

    3) Were it not for overseas sales, GM might still be in very hot waters.....it bothers me that a company that seemingly couldn't turn ANY kind of profit before the bailout is suddenly so profitable as to be able to dole out profit sharing bonuses to its workers....is the company truly making domestic AND foreign sales profit?

    Just a few questions and thoughts I have
  • Frank 2011/09/19 17:20:01
    The US Treasury shouldn't part own GM, it should be the taxpayer. Give me a GM job, I could use the $5,000 bonus and a $3.00 an hour raise.....
  • MadAsHEck 2011/09/19 17:07:05 (edited)
    Unions may be finally waking up to some extent, but they have a long way to go.

    Anti-Union sentiment is rising in the country as more people feel that Unions are killing the goose that laid the golden egg. Over all Union membership is falling , and that is what the heads of the Unions need to keep their business running. A Union is a big business, that generates no product, and depends on Union dues for it's sole income. Union leaders live the life of the CEO's they condem to the workers on that income. .

    This could be a good first step in the right direction. Only time will tell.

    One article I read. If it were not for sales in China, GM would be back asking for a handout, they are not selling well here in the USA. My Son in Law is a Chevy Salesman, and he says that they get hardly anyone in the showroom now. Where they used to have 5 guys on at all times, he says most of the time its just him.
  • ETpro 2011/09/19 14:58:13
    I think that GM's loa shuold be repaid to taxpayers in full before they start divvying up profits, but the principle is a healthy one that's widely used by corporations in Germany. There, unions actually participate on the board along with business-oriented diretors. They understand that their income is tied to the company's income. They become partners
  • XENON23 ETpro 2011/09/19 15:43:14
    I agree
  • Temlakos~POTL~PWCM~JLA~☆ 2011/09/19 13:11:24
    They don't have any "profits" to share. What they have, is taxpayers' money.
  • Jimbo 2011/09/19 11:36:55
    UAW owns GM.
  • lonewolf 2011/09/19 11:30:26
    and its not what people think it is.

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