GM, UAW Reach New Contract, Spring Hill Plant To Re-Open

As predicted, the hand-wringing over Sergio Marchionne’s letter to Bob King was not enough to derail the basic motivations for the UAW to reach new deals with the automakers. Last night the union agreed to a tentative agreement with GM, its pattern target for this, the first round of negotiations since the bailout. That agreement must be approved by the union rank-and-file, but if ratified, Reuters reports that it includes

• The re-opening of the idled Spring Hill, TN plant to build an unspecified “new product”
• $5,000 signing bonuses (at a cost to GM of $245m)
• According to the NYT, “significant improvements to health care benefits” are also part of the deal
• According to AN [sub], the union “successfully fought back efforts to make major changes — and weaken — our retirement plan.”

What’s not yet clear is whether entry-level “Tier Two” workers, who make half what their “Tier One” brothers make, got a raise. Though it’s clear that GM and the UAW worked to avoid major increases to fixed costs by concentrating on jobs and profit-sharing bonus checks, the NYT confirms that the union was asking for some kind of entry-level raise. Given that no outlet is confirming any such Tier Two raise, though, it seems as though the UAW’s culture of seniority-over-solidarity has won out. We’ll report on details as they emerge, which is likely to happen as locals ratify the contract over the next ten days.

And though the UAW still faces battles with a feisty Marchionne and a wary Ford negotiating team, union President Bob King still has an eye on the big picture. Telling Bloomberg that he’s “re-committed” to the goal of organizing non-union transplant factories, he argues

As long as unionized workers are being forced to compete with nonunion workers who in most cases receive lower pay and benefits — many in temporary jobs — there will continue to be a downward pressure on the wages and benefits of all autoworkers.

In a recent conversation with Bloomberg, CAW President Buzz Hargrove essentially argued that the automakers would give up little in this round of negotiations. The key then, was finding things the union wanted that didn’t really cost GM that much. In that light, the re-opening of Spring Hill makes a lot of sense. It’s considered one of GM’s better, more modern plants, and it gives the UAW a bastion in Tennessee, where Nissan and Volkswagen both have new, non-union plants. The problem: unless the union was able to negotiate an entry-level wage hike, new hires at Spring Hill will make less than many of their non-union counterparts [sub] at VW Chattanooga and Nissan Smyrna. At that point, having a UAW plant in the South doesn’t especially help the union’s cause.

Caught between bailed-out automakers that it can’t be too aggressive with and non-union workers who show no signs of wanting or needing representation, this agreement doesn’t change the UAW’s basic predicament. We’ll see what the final details look like when the locals approve the deal, but it might not be too early to say that Detroit’s automakers will have four relatively easy years on this contract.