UAW to give up COLA and bonuses

Sources: UAW to give up COLA and bonuses

David Barkholz

Automotive News | February 18, 2009 – 4:32 pm EST


More details emerged today on the UAW concessions made to the Detroit 3 in advance of yesterday’s viability plan filings by General Motors and Chrysler LLC.

The new agreements call on workers to give up lump-sum bonuses over the next two years and their cost-of-living allowances, said two UAW sources familiar with the talks. What’s more, the contracts limit overtime pay and supplemental unemployment, the sources said.

At Chrysler, workers also will forfeit a $600 Christmas bonus, the sources said. Automotive News first reported the concessions on bonuses, overtime and supplemental unemployment yesterday.

Detroit 3 and UAW officials are keeping mum on the agreements until workers have an opportunity to vote on the provisions. Details about the concessions were not released when GM and Chrysler revealed the viability plans to the U.S. Treasury Department.

UAW Vice President Bob King and GM manufacturing and labor chief Gary Cowger declined to comment when asked about the changes at an event today in suburban Detroit.

Still left to be negotiated is future funding of retiree health care trusts. Loan provisions require the union to take carmaker equity in lieu of cash for half the remaining money owed the multibillion-dollar Voluntary Employees’ Beneficiary Associations.

In the case of GM, the UAW is being asked to take GM equity for half of the $20 billion that the carmaker owes the VEBA.

Nevertheless, the UAW engaged Detroit 3 negotiators in marathon bargaining over the past week to meet the filing deadline for the viability plan. As a requirement of $17.4 billion in federal rescue loans, GM and Chrysler must bring their work rules and labor costs in line with their Japanese counterparts in the United States.

Although Ford isn’t getting loans, it may ask for a $9 billion line of credit and wanted to be a part of a contract pattern to stay competitive with Chrysler and GM. Ford said the UAW agreement will help it avoid asking for financial assistance.

In the plans released yesterday, GM and Chrysler said they will need up to $21.6 billion to weather the current dismal sales climate.

The Detroit 3 got the UAW to move on several fronts, one of the sources said. Instead of paying overtime for work beyond eight hours, they will pay overtime only for work beyond 40 hours during a week, the source said.

The union gave up two of the four lump-sum bonuses due workers during the four-year contract, the sources said.

Supplemental unemployment benefits, or SUB, also have been limited.

Idled workers with more than 20 years of service can collect SUB pay for 52 weeks at the traditional 72 percent of gross pay and another 52 weeks at half pay, the source said. Workers with less than 20 years get 72 percent SUB pay for 39 weeks and half pay for an additional 39 weeks, the source said.

Those SUB provisions are all that UAW members can get now that the Jobs Bank has been eliminated. The Jobs Bank was a program that guaranteed idled workers 95 percent of pay and full benefits indefinitely if no other job could be found for them.

Chrysler and GM were required by the 2007 contract to pay up to $4 billion for the Jobs Bank and SUB pay during the four-year agreement.

Details of total cost savings have not been made public

Seniority Lists
Recent Posts!
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts


*Standard text messaging rates may apply from your carrier