UAW-General Motors Proposed Contract At a Glance

After a brief two-day strike in late September, United Auto Workers (UAW) negotiators signed a tentative agreement with General Motors. Members began voting on the proposed contract local by local in early October to meet an October 10 deadline. Rank-and-filers upset over numerous givebacks listed below have launched a “vote no” campaign.

CONTRACT LOWLIGHTS

If voted up GM workers could face:

• Two-tier wages and benefits for new hires in what the company and union define as "non-core" jobs—those frequently bid on after injury or by higher seniority workers after years being on the line. The category includes most of the non-assembly workforce. New hires will start at $14 to $14.61.

• A wage freeze over the four years of the contract.

• Cost of living (COLA) wage increases will be diverted to pay health care inflation costs for active workers.

• The creation of a health care fund, or Voluntary Employee Benefits Agreement (VEBA). The company will start the fund with $29.9 billion and would turn it over to the union in 2010. Opponents note that the VEBA could become underfunded like those created for UAW members at Caterpillar and Detroit Diesel.

• New hires will be given access to a 401(k) instead of traditional pension benefits, health care at higher co-pays, and no access to other traditional benefits won in previous contracts, such as a paid Fourth of July week.

HIGHLIGHTS?

UAW officials claim to have made gains in a few areas:

• Up to 20 "backstop" payments of $165 million into the VEBA by GM if the fund is "projected to be insufficient to provide current benefit levels for at least 25 years" from the required payment.

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• Instead of wage increases, workers upon ratification will be given a $3,000 signing bonus plus lump-sum bonuses of 3 percent, 4 percent, and 3 percent for the last three years of the contract. Opponents say this could lead to the loss of tens of thousands of dollars over the work life of the average GM worker because their base pay would not grow.

• More than 3,000 temporary workers at GM will be given permanent positions with the company and will be paid traditional wages.

• Another round of early retirement offers and buyouts could happen. This would further flush out higher-paid senior workers who still make up the majority of GM's workforce.

• A commitment to "job security" and a "moratorium” on outsourcing and plant closings. Fifteen plants are put at risk contingent on “future product allocation” and demand for particular vehicles. Contract opponents point out the “job security” pledge is the same promise the company has made for 20 years while continuing to downsize.

• Small increases to retiree benefits, including lump-sum bonuses each of the four years of the contract. Increases to health care co-pays, however, could cancel this out.


Other Coverage of the GM-UAW contract negotiations, strike, and vote.

National Auto Strike Leaves Lingering Questions, October 2007.

VIEWPOINT: Former UAW Leaders Say Vote No on GM-UAW Agreement, October 2007 Web Exclusive.

Auto Makers Push VEBA Solution for Industry Crisis, September 2007.