|GM, UAW pact outlined |
|DETROIT (AP) — General Motors Corp. will put $29.9 billion into a fund for retiree health care and guarantee that cars and trucks will be built at 16 U.S. plants as part of its tentative contract agreement with the United Auto Workers, according to a summary of the agreement released Friday by the union. |
The agreement confirms what GM officials told union leaders earlier this year when it ended production of Saturns at the Spring Hill plant.
After the company finishes retooling the Tennessee plant, it will build a Chevrolet crossover vehicle until 2012 and begin building a new sport utility vehicle in 2011. The replacement for the crossover will depend on demand and the business situation at the time.
The agreement also confirms production of the Corvette and Cadillac XLR until 2011 at the plant in Bowling Green, Ky., with replacements starting in 2012.
GM will pay an additional $5.4 billion to fund retiree health care while the UAW is setting up the health care trust which it will manage. The formation of the trust, called a Voluntary Employees Beneficiary Association, or VEBA, was a major part of this year’s contract agreement. GM has around 340,000 retirees and spouses.
Under the tentative contract, 3,000 temporary workers will get permanent jobs at the full-time wage rate. There also is a moratorium on outsourcing.
Hourly workers will get economic gains totaling $13,056 over the life of the four-year contract, the UAW said. But some workers will be getting less than before.
New hires who aren’t doing direct manufacturing jobs, such as groundskeepers, will make between $14 and $16 an hour, according to the summary. Manufacturing workers would make a starting wage of $28.12 under the new contract. There are 16,000 people doing non-core work in U.S. plants, the UAW said.
The tentative contract passed a hurdle earlier Friday when UAW officials from across the U.S. approved the pact.
UAW President Ron Gettelfinger said at a news conference that local union leaders will now take the pact to the 74,000-strong membership for a vote. He said the voting would wrap up and be counted by Oct. 10.
Gettelfinger called the guarantees on building cars and trucks at U.S. plants “unprecedented” and said he expects the tentative agreement to pass, although some members have concerns about its terms.
“We’re happy with this stuff,” he said.
Gettelfinger also said the union had not yet picked the automaker — Ford Motor Co. or Chrysler LLC — with which it would bargain next.
If the company’s UAW members ratify the deal, its provisions likely will save the company about $3 billion per year, which it can pump into the development of new products, according to several industry analysts.
GM will put $24.1 billion into the VEBA in January 2008, although the fund won’t start covering retiree health care until two years later. GM will make up to 20 additional $165 million payments to the VEBA anytime the fund’s level is insufficient to provide benefits for at least 25 years.
GM will be required to pay cash interest on a $4.37 billion convertible note for the benefit of the VEBA, and the fund’s trustees will be able to convert that note to GM stock. GM’s active workers also will be required to contribute 4 cents per quarter for the VEBA.
GM shares rose 16 cents to $36.62 in late trading Friday after rising as high as $37.75 in earlier trading.
GM made commitments to build current or future products at 16 factories nationwide. Because assembly plants need parts from other GM plants, the commitments also protect jobs at dozens of engine and transmission, stamping and metal fabrication factories, the UAW summary said.
Details of the tentative deal thrilled Dave Green, president of one of two local unions at the Lordstown, Ohio, assembly complex, because the company committed to build a new global small car at his plant.
“The whole thing looks fantastic,” he said.
The agreement, he said, preserves wages and health care for active workers “and we’ve done creative stuff that’s going to make the company profitable in North America.”
Published in The Messenger 10.01.07