GM, UAW reach first labor deal since bankruptcy

  • World
  • Saturday, 17 Sep 2011

DETROIT, Sept 17 (Reuters) - General Motors Co and the United Auto Workers union reached a proposed contract for almost 49,000 production workers that both sides said would create new U.S. factory jobs and include profit-sharing bonuses.

Details of the tentative contract reached on Friday were being withheld until the contract could be reviewed by UAW officials at a meeting set for Tuesday in Detroit.

The proposed contract, which must be ratified by rank-and-file workers, represents the first since U.S. taxpayers bailed out GM and Chrysler Group LLC in 2009.

The proposed GM deal would move production of a new vehicle to the automaker's now-idled assembly plant in Spring Hill, Tennessee, a person with knowledge of the deal said.

The contract would also pay signing bonuses of around $5,000 for each worker, equivalent to a total cost of about $245 million for GM, the source said.

GM and the other two Detroit automakers offered one-time contract-signing bonuses and profit-sharing rather than traditional wage increases in an effort to avoid the kinds of fixed costs that contributed to the industry's near collapse two years ago.

The former Saturn plant in Tennessee had been the site of GM's experiment with a more collaborative relationship with workers based in part on the model of Japanese automakers led by Toyota Motor Corp .

GM scrapped the Saturn brand as part of its 2009 bankruptcy and the assembly portion of the plant has been shut. An engine plant at the site remains open. The UAW chose to complete negotiations for a new contract with GM first, before reaching a deal with Chrysler and finally with Ford Motor Co , those close to the talks have said.

The talks between the U.S. automakers and the union in Detroit have played out at a time of increasing uncertainty about the strength of U.S. auto sales for the remainder of this year and in 2012, as well as concern about the risk of another recession.

"As America struggles with record levels of unemployment, we aimed to protect the jobs of our members - to guarantee good American jobs at a good American company. And we have done that," UAW President Bob King said in a statement.

At stake in the Detroit contract talks are wages and benefits for about 113,000 unionized U.S. auto workers who have gone without a base pay increase since 2003.

Local 2250, which represents workers at GM's Wentzville, Missouri, plant, said in a notice that details on the proposed contract would go to union members there on Tuesday.

UAW spokeswoman Michele Martin said it was not clear yet when local bargaining units would complete ratification votes.

A person with knowledge of the negotiations said both GM and the union's leadership expected to complete ratification votes within a week to 10 days. The timing is key because King and other union officials are expected to remain focused on winning approval for the GM contract before turning their attention to the negotiations with Chrysler.

The union gave up the right to strike at GM and Chrysler until 2015 under the terms of the Obama administration's funding to restructure the automakers in bankruptcy.

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