Thursday, September 29, 2011

GM workers approve deal; Spring Hill plant to have 'maximum model flexibility'

Factory workers at General Motors have overwhelmingly approved a new four-year contract with the company that has profit-sharing instead of pay raises for most workers and promises thousands of new jobs.

The United Auto Workers union said Wednesday that 65 percent of production workers voted for the deal, while 63 percent of skilled-trades workers such as electricians were in favor. Voting by GM’s 48,500 blue-collar workers ended on Wednesday.

A top General Motors executive said the Spring Hill plant where the automaker plans to restart assembly and create some 1,700 jobs as part of the new labor deal will have “maximum model flexibility.”

The automaker has said it intends to reopen the former Saturn plant with staffing and operating rules still being worked out with the union.

GM Chief Financial Officer Dan Amman said Wednesday the plant will have flexibility to make “distinctly different vehicles” and be ready to quickly adjust to changing market demands.

Amman declined to give a date for the restart or say if there is a limit on entry-level workers.

Under the new contract, GM can have as many entry-level, roughly $15-an-hour workers as it wants. Amman said after 2015 only 25 percent of the factory workers can be paid the lower wage.

Among terms of the four-year contract between the United Auto Workers and GM, Spring Hill is to get two new midsize vehicles to assemble. One would arrive sometime next year and bring 600 jobs; the other would come in 2013 and add 1,110 jobs.

GM was the first company to reach a deal with the auto workers’ union, which is now negotiating with Ford Motor Co. and Chrysler Group LLC.

Under the deal, which runs through September of 2015, most workers won’t get annual pay raises. But they’ll get $5,000 signing bonuses, profit-sharing checks and other payments that total at least $11,500 during the next four years. GM also promised to add at least 5,100 jobs.

Entry-level workers who now make a base wage of around $15.78 per hour will get 22 percent raises. GM currently has about 1,900 entry-level workers who make about half the pay of longtime UAW members.

The deal cuts GM’s factory worker labor costs to $5 billion per year, less than a third of the $16 billion the company paid in 2005, Amman said. The figure was $11 billion in 2007, as the company headed into bankruptcy protection and needed a government bailout to survive.

The deal also includes offers for older employees to leave so GM can hire new ones at entry-level wages. Eligible workers can get up to $10,000 if they retire within the next two years. There’s also a $65,000 bonus for skilled-trades workers such as electricians if they retire or leave the company between Nov. 1 and March 31.

GM expects 1,000 skilled trades workers and up to 1,000 production workers to take the exit packages and be replaced by new hires who’d make the cheaper entry-level pay.