By on September 17, 2011

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.

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25 Comments on “GM, UAW Reach New Contract, Spring Hill Plant To Re-Open...”

  • avatar
    Educator(of teachers)Dan

    “Un-specified” product worries me. What are they gonna build there? An Opel to be named later?

  • avatar

    This would help to explain why Bob King wasn’t returning Sergio’s phone calls a few days ago: Negotiation leverage.

  • avatar

    Definitely too early to tell but it may NOT bode well for the UAW over the longer haul if what has been said so far is any indication. Part of that is how much the tier two workers now make, if an increase was had at all it may or may not be enough to counter the pay from the non UAW plants and that spells doom for the UAW down the road.

    • 0 avatar

      My personal point of view is that a worker will hope to get the best terms and the most money in exchange for their time at work. But the employer has no obligation to the employee beyond a fair day’s pay for a fair day’s work. The employer’s only obligation is to make money for its shareholders and owners. If employees want to share in profits and losses let them buy stock.

      When it comes to selling a product, that is where the money is to be made, IF the product is competitive in the marketplace. What we already know is that GM’s products were not competitive in the market place which resulted in them consistently losing money over a four-decade time frame, and eventually declaring themselves insolvent.

      Now that the US tax payer has stepped in and bailed out this zombie to keep it going on unceasing lifesupport, all of sudden the UAW is emboldened to demand even more than this new lease on life.

      For most people still working for a living and trying to make ends meet, this is a very difficult concept to get their minds around. Shouldn’t increased benefits and pay be consistent with a profitable company AFTER all bail out bucks have been repaid?

      I’m not surprised then that Ford is doing so well, since they were never raised from the dead and nationalized. Neither am I surprised that the UAW will not be happy until they have negotiated Ford into the grave and then lobby to get the tax payers to bail them out, too. No doubt the UAW has some unpleasant surprises in store for Ford unless they, too, succumb to UAW demands. After all, Ford can afford it. GM and Fiatsler not so much.

  • avatar

    Lol, that signing bonuses stipulation sounds twee.

  • avatar

    Just to set the record sraight. The Canadian Auto Workers president is Ken Lewenza. Buzz retired in 09.

    Just a reminder, I did predict there will be no UAW/CAW sanctioned labour disputes in 2011.

    For my next prediction…The GM Canada/CAW agreement has another year to run. Sept 15 2012 or around there. I will promise you,that before the ink has dried on the 2011 UAW GM deal, GM will be knocking on Ken Lewenza door.

    Take that one to the bank my fellow B&B ers.

  • avatar

    Note to UAW. I will never buy one of your cars again. I’m glad my Ford was made in Mexico.

    My health care plan has a $4,000 deductable and I can’t even put my wife on it. So I’m not going to pay for your health care too!

    • 0 avatar

      And with all due respect to you. Your health care issue is exactly why you and many others need a union.

      • 0 avatar

        Funny, I have rather excellent health insurance and a nice 401(k) plan through my private employer, and we don’t have a union.

        Oh yeah, and my coworkers actually give a damn about the work we do, because our annual profit sharing, 401(k) match and overall value of our retirement portfolio is tied directly to our company’s performance. Notice I said “our” company, as we are allowed to hold up to a certain percentage of our 401(k) in company stock (and most do).

        Amazing how individual initiative and pay-for-performance works in a free market economy. But it also requires me to step out of the box from time to time and (gulp) do some difficult, unpleasant work.

    • 0 avatar
      John Horner

      Yeah, I’m getting the shaft on health care, and I want to be sure everyone else is too! What an attitude.

  • avatar

    Geez, they’re only going to get $5,000 to deign to continue to be overpaid? Sometimes, there’s just no justice in America.

  • avatar

    I have a stupid question. Doesn’t the UAW own large chunks of GM and Chrysler? Aren’t they just negotiating with themselves then?

  • avatar

    If every worker in the USA had health benefits equal to the uaw what do you suppose that would do to the cost of living?

  • avatar

    Meanwhile, about 30 miles away in Smyrna, Tennessee, Nissan workers happily earn competitive wages and benefits, without the burden of union work rules and the legacy costs of two retirees for every one worker.

    Honestly, after reading Crash Course, I’m convinced that Donald Ephlin is turning in his grave, and can only hope that evolution takes care of people like Stephen Yokich…

  • avatar

    It is nice to see everything back to normal at GM. They cave in to the union that ruined them. I just got a rebate offer in my email on any new 2012 Chevrolet. And the last time I was at National Car Rental, there was a row of new Camaro SS Convertibles. The only thing that has changed is that now they are wasting MY money.

    • 0 avatar

      Caved in to the union that ruined them? The UAW decided that my intake manifold gasket failure was mine to fix? And the millions of other design and bean counter defects that countless GM customers had to eat? Wow, no wonder they want to kill the UAW…they have super powers…

  • avatar

    The UAW still fails to explain the silence from the ‘downtrodden’ workers at non-unionized plants, except to claim that their voices are stifled by their employers.

    I’ll explain the silence: There is no outcry from non-unionized auto workers because they’re not actually downtrodden. We live in the 21st century, so with all the means of communication available to these workers, you’d expect to hear something.

    The UAW must be close to extinction.

  • avatar

    “Significant improvements to health care benefits” – How much better can they get? Correct me if I’m wrong, but I don’t think I’ve ever met a UAW worker who didn’t get full medical, dental and optical. What’s left, happy endings from massage therapists? Bionic arms?

  • avatar
    John Horner

    Bloomberg is reporting a $2 to $3 / hour base wage increase for new hires.

  • avatar

    I demand that 500 million doctors, accountants, sports stars, CEOs and upper-management types and then 500 million engineers of ALL types be allowed entrance into the USA to drive wages down for ALL groups.

    Just to be “fair,” yah’ know.

    A mere subsistence level of existence is good enough for the working-poor.

    And include bureaucrats and politicians.

    Let’s ALL gather by the dumpsters for our vittles!!!!!


  • avatar

    Does the UAW thinks they can antagonize Nissan in Smyrna via nearby Spring Hill and rally the troops to organize ?

  • avatar

    Its the workers at Nissan that have the final say. I can’t see where using antagonizing tactics will contribute to a yes vote.

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