UAW Deal Saves GM $2.8 – $3.3b Per Year… In 2010
Even as Chrysler workers ponder whether or not to accept their new contract, GM is bragging about announcing the blessings the union has bestowed on the automaker's bottom line. Under the two-tier wage structure in the new United Auto Workers (UAW) contract, GM will be paying "non-core" workers about a third of the total wages and benefits they presently shell out to their union workers. The Detroit Free Press reveals that revisions to these employees' pension fund and health coverage will lower their cost to the company to $25.65 per hour. That's compared to the $78.21 per hour in wages and benefits GM currently pays all their UAW workers. What's more, GM expects 65 to 75 percent of their hourly employees to retire during the four-year life of the contract; many of these retirees will be replaced with lower-paid workers. CFO Fritz Henderson predicts the new labor deal will save The General some $2.8b in annual cash flow by 2010, and $3.3b by 2011.
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Ack. Please delete the above non-comment. Treats me right for trying to use a fake xhtml tag format. hltguy was, I'm sure, being just a little sarcastic with the Cobalt reference, but it is good (and not just a little sad) to hear pixarwolf's rather pathetic real-world experience in the fuel economy department. Maybe it's them Aveos that will fly off the lot. Except their economy isn't exactly world beating either. In fact, it is downright horrible for such a wee little penalty box. On topic: that is a fairly impressive cost savings. It would be informative to see the per-vehicle bottom-line impact.
Yes, sarcastic. The opportunity in the near future, imo, will be for those car companies that can make a profit on fuel efficient vehicles. If Turkey decides to block our access into Iraq, oil prices could spike to $95 to $100 a barrel. If Americans flock to small cars, it would not take a Phi Beta Kappa to figure out Honda, Toyota, Hundai and Kia will be well positioned. A ten year old Focus platform, a warmed over Cavalier will not get it done.
it need not be said , but I will save someone else from having to do so. the big shots will most likely get a double bonus for saving 3 billion. whats a few million pasted out amongst the boys. cigars all around.
Icahn reveals how Wagoner got his job here: http://www.portfolio.com/views/blogs/daily-brief/2007/10/11/how-did-this-guy-get-in-charge