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GM's Workers Guaranteed $12,500 in Bonuses in Tentative UAW Contract

September 21, 2011
5 min to read


United Auto Workers members working for General Motors Co. will be guaranteed at least $12,500 in bonuses over the next four years under a proposed deal that will also result in 6,400 saved or added jobs and $2.5 billion in additional U.S. investment.


That's all if the deal is ratified by a majority of the 48,500 UAW members who work for GM, UAW President Bob King said Tuesday in a media briefing at the GM-UAW Center for Human Resources Center off Jefferson Avenue.

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Earlier in the day, King and Joe Ashton, the union's vice president for GM, briefed local union presidents on the tentative contract. Local leaders then voted to recommend it for ratification to their membership. They'll now return to their respective plants to brief the rank-and-file, who will vote on the contract in the next week, reported The Detroit News.


"One of our main objectives is jobs, and I think we met that objective," said Ashton, adding that 11,400 jobs have been recovered over the last two years, and there will be 6,500 more over the next two years.


But workers won't be getting back cost of living increases or base pay raise. The jobs bank, which provided pay and benefits to laid-off workers, isn't being restored.


Workers, however, will get jobs at five or more U.S. plants. Work also is coming back from Mexico.


GM will reopen its former Saturn assembly plant in Spring Hill, Tenn., which was idled in 2009 during the automaker's bankruptcy. The automaker will add 500 workers within the year to the Spring Hill plant for one midsize car, and launch a second midsize car at the end of 2013, Ashton said.

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Other plants to benefit include the Warren transmission plant; Wentzville, Mo.; Saginaw; and Fort Wayne, Ind., which will build a next-generation truck.

Wentzville gets an additional shift to make the next-generation of Chevrolet Colorado and GMC Canyon compact pickups.


A new compact car will be built at a site still to be disclosed in a move that will add or retain 500 jobs.


Work that would have been done in Mexico will remain in Saginaw.


Another 630 jobs will be retained at a pair of powertrain facilities: Romulus gets a new engine program and there is new transmission work for the plant in Warren under a plan to repatriate work from Mexico. Saginaw casting receives additional investment in a contract that ensures 1,400 of the additional jobs are at supplier plants.

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The Shreveport, La., plant is still scheduled to close, but the Janesville plant remains on standby.


Other details being released Tuesday include confirmation of a $5,000 signing bonus, profit sharing as high as $12,000 and $1,000 inflation protection lump sums paid out in 2012, 2013 and 2014.


UAW members who work for GM will see a minimum profit sharing payout of $3,500 in 2012 for 2011 profits under a formula designed to be easier to understand and based on North American profits. Profit-sharing checks could total as much as $20,000 over the life of the agreement, but that will depend on GM's North American profits, King said.


There is an additional $250 yearly award for meeting quality targets.


Entry level wages increase to $19.28 by the end of the agreement. About 4 percent of GM's workforce is made up of so-called tier two workers who earn $14-$16 an hour, about half of veteran pay. Those workers will get an immediate increase to $15.78 an hour upon ratification, and they receive yearly increases for the next four years until they hit $19.28 an hour.

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The proposed agreement doesn't cap the number of entry-level workers GM can hire, but after 2015, it will be capped at 25 percent unless the union and company agree to change it in the next round of contract talks.


The contract also restores supplemental unemployment benefits, which tops off what they receive from the state.


Improvements to health benefits include unlimited $25 doctor's office visits.

The union also proposes that 10 percent of each employee's profit sharing go into the health care trust to meet obligations to retirees. King said the company is still exploring the legality, but the UAW wants the membership to ratify this move.


GM will offer buyouts of $65,000 to skilled trade workers who retire between Nov. 1 and March 31 and $10,000 for other eligible workers. The move makes room for GM to hire new workers at the lower wage, which helps keep the company's labor costs competitive — a condition of the federal bailout received in 2009. King said there are 14,000 to 17,000 workers eligible to retire.

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The UAW and GM reached their agreement late Friday.


King said he will meet with his leadership team to decide where their next focus is, but the odds-on favorite is Chrysler Group LLC, which was close to an agreement last week. Talks broke off Wednesday when King's attention on GM angered Chrysler CEO Sergio Marchionne. Marchionne left for Europe last week and is returning to Auburn Hills today.


King declined comment on an angry letter sent to him by Marchionne late Wednesday. King added the union wouldn't wait for ratification of the GM agreement to resume talks with the next company.


Ford Motor Co. has been moving at the slowest pace and is prepared to be the last to reach and ratify a new contract. The Ford contract was extended indefinitely while the two sides continue to talk.


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