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Tuesday, September 20, 2011

GM/UAW reach labor agreement post 2008 bailout with ease, adding 900 future jobs to Michigan

United Auto WorkersImage via Wikipedia
General Motors and United Auto Workers
deal will add manufacturing jobs to Michigan.

Confirmation that President Barack Obama’s bailout for General Motors (GM) in 2008 was a good move, labor negotiations to reach an agreement on a new contract between GM and the United Auto Workers (UAW) was reached with relative ease late last week. 

The agreement will add much-needed employment opportunities in Michigan, were the unemployment rate was 11.2% for August 2011.

It’s estimated that the recently announced tentative labor contract between GM and the UAW will add or save more than 6,000 U.S. jobs during the life of the four-year contract.

Initially, the positions will be filled first by laid-off or displaced GM workers but, the majority of the jobs added are expected to be by new hires. Up to 900 employment opportunities additions will take place at GM’s three Michigan plants in Warren Saginaw and Romulus coupled with $925 million dollars of new investment.  

Specifically, the number of jobs and investment dollars will come to Warren Powertrain -$325 million, 360 jobs- Romulus Engine-$385 million, 285 jobs- and Saginaw Casting Plants-$215 million, 255 jobs.

Details of agreed labor contact between the UAW and GM includes a $5,000 signing bonus, $3 an hour pay increase over four years for lower-wage workers hired after September 2007, a change in profit-sharing basis on with a upgrade to the bonus tied to North American results for the formula and not just those for the U.S.

Recent hire “first-tier” workers receive no wage increase. So-called “second-tier” workers, hired after September 2007 in Group C jobs will see an immediate increase to $15.66 an hour with one and two years’ worth of service, and up to $16.53 if they've worked more than two years. Workers in Group B jobs will see an immediate increase to $16.66, with one and two years of work, and to $17.53 if they been with GM more than two years. 

Second tier wages will increase over the life of the contract to $18.28 for Group C workers and to $19.28 for Group B workers.

Under the profit-sharing agreement, workers will receive up to a $250 bonus each year regardless of whether GM North America is profitable. This bonus is tied to overall production quality. The maximum each worker could receive in a profit-sharing bonus is $12,000 per year. 

In the tentative labor agreement, workers percentage of health-care costs paid stay the same throughout the contract but, health-care improvements were added into the agreement for new entry-level workers. Also, a UAW negotiated "inflation protection lump sums" of $1,000 in each year of the contract, will be available to all workers.

The agreement is expected to be presented before the UAW membership for ratification within the next two weeks. 

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