United Auto Workers ratify General Motors deal

Union's deal clears way for negotiations with Ford
By Ben Klayman and Bernie Woodall
|labour-reporter.com|Last Updated: 09/28/2011

(Reuters) - Workers represented by the United Auto Workers (UAW) union approved a four-year labour contract with General Motors Co. on Wednesday, the first such deal for the top U.S. automaker since its 2009 bankruptcy.

Ratification of the GM deal, which covers 48,500 hourly workers, clears the way for the union to complete talks with the automaker's crosstown rival, Ford Motor Co.

The deal adds or saves more than 6,000 U.S. factory jobs, raises wages for entry-level employees and pays each worker at least $11,500 in bonuses over the four years, the union said. The union also estimates the deal could create another 57,600 jobs at suppliers and other auto-related businesses.

"When GM was struggling, UAW members shared deeply in the sacrifice," UAW president Bob King said in a statement. "The UAW has shown that we are totally committed to helping the U.S. auto companies succeed. GM is prosperous today because of its workers."

The UAW and Ford could reach a deal on a proposed contract as soon as this week. Workers at Ford have pressed for a richer deal because of the automaker's faster turnaround and ability to have avoided the bailouts needed at GM and Chrysler.

The UAW said 65 per cent of production workers voted in favour of the deal, while 63 per cent of skilled trades workers also backed it.

The new UAW contract leaves GM's break-even point unchanged and allows the automaker to tackle the risk of its underfunded pension plan, one of the few issues left unaddressed by the restructuring directed by the Obama administration.

"When we went into this labour negotiation, we were very focused on that," GM CEO Dan Akerson told a conference in New York on Tuesday. "We could not do anything to negatively bias our break-even point."

King joined the Ford talks this week, and the focus shifted to the tough issues of compensation and additional jobs.

The union began an intense focus on Ford last week, a day after failing to finalize a deal with Chrysler Group LLC. It has extended its contract with the Fiat SpA-controlled automaker until Oct. 19.

CHRYSLER TALKS

While UAW officials in the Ford talks said on Monday they expected "to have good news for our membership by the end of the week," discussions at Chrysler, the smallest and most fragile of the Detroit automakers, are progressing much more slowly. Those talks continued on Wednesday, a Chrysler spokeswoman said.

Chrysler, which nearly collapsed two years ago, is still executing its own financial turnaround and trying to change public perceptions of its vehicle lineup. The company emerged from bankruptcy protection with a debt load that included $7.6 billion in government loans.

In May, Chrysler repaid those loans through a refinancing that helped cut its interest payments, but effectively swapped government loans with private ones.

As a result, Chrysler is eager to hold down its fixed costs beyond the 2015 expiration of the deal now being negotiated.

Last week, Chrysler CEO Sergio Marchionne told reporters in Italy that workers should not expect the package proposed at GM, calling it a "completely different" entity from his company.

Add Comment

  • *
  • *
  • *
  • *