Business, Finance & Economics

Details of United Auto Workers union contract with General Motors emerge

The United Auto Workers union has reached a tentative contract deal with General Motors Co.

While G.M. officials and the U.A.W. declined to comment on the details of the agreement until local union leaders had reviewed it, people briefed on the negotiations said it includes a $5,000 signing bonus for hourly workers in place of cost-of-living wage increases.

Entry-level workers, who earn about half of what longtime workers earn under a controversial two-tier wage system adopted by Detroit car manufacturers in recent years, will get a $2 to $3 an hour wage increase, the Detroit News reports. This will boost their pay from $14 to $16 an hour to $16 to $19 an hour.

Among other changes: Profit-sharing bonuses will be calculated on North American profits, rather than U.S. earnings, and G.M. will reopen its Spring Hill, Tenn., factory.

According to Bloomberg Businessweek:

The G.M. deal will serve as a template for contracts that still must be negotiated with Chrysler Group LLC and Ford Motor Co. It would set the pay and benefits for 112,500 U.S. auto workers. It also will set the bar for pay and benefits at nonunion auto companies and other industries across the country.

The contract is the first since G.M. and Chrysler received government bailouts to make it through bankruptcy protection in 2009.

Chrysler and Ford are operating under a contract extension as the old agreements of all three Detroit automakers expired midweek, the Detroit News reports.

Harley Shaiken, a labor professor at the University of California, Berkeley, told the New York Times that the agreement solidified G.M.’s cost structure for future growth. “I think the U.A.W. went way beyond holding the line here,” he said. “The union made some real gains in the contract in the context of where G.M. becomes a more competitive company.”