Experts: GM-UAW deal likely to pass

September 19, 2011

Experts: GM-UAW deal likely to pass

Pact’s job, wage gains may set framework in Ford, Chrysler talks

/ The Detroit News

Labor experts said Sunday it’s likely that General Motors Co.’s hourly workers will ratify the tentative union contract agreement reached this weekend, even if some quibble with the terms.

The presidents of United Auto Workers’ local unions are on their way to Detroit, where their national bargaining team will brief them Tuesday on details of the pact reached with GM on Friday. Major aspects of the pact, including higher pay for entry-level workers, leaked out over the weekend.

Ratification votes at local unions are expected in seven to 10 days.

“There are new jobs and more money,” said Kristin Dziczek, a labor expert at the Center for Automotive Research in Ann Arbor.

“There are not concessions and job loss. What’s not to like?”

Added Harley Shaiken, a labor professor at the University of California at Berkeley: “This is a contract that shows considerable gains in a dismal economic context.

“There is always opposition to a contract, but it is my sense that this will have support.”

After wrapping up with GM, the UAW is expected to focus on Chrysler Group LLC, where a last-minute glitch at the bargaining table last week shut down substantive progress. Reaching an agreement with Chrysler could take another couple weeks.

Ford Motor Co. is likely to finish contract talks last, and those negotiations may be the toughest of all three.

Under provisions of their 2009 government rescue, workers at GM and Chrysler are prohibited from calling a general strike. But Ford didn’t take a bailout, so its workers are under no strike restriction.

The tentative agreement between the UAW and GM, covering 48,500 workers, is expected to establish a framework for the Chrysler and Ford contracts, although each company will put its own stamp on its own contract.

The Detroit News reported Saturday that the GM pact includes a $5,000 contract signing bonuses and a $2- to $3-an-hour pay bump for entry-level workers who now make $14-$16 an hour.

The UAW also was eager for this contract to assure more jobs, and greater job security for its members. It appears that the tentative agreement does that.

GM will reopen its assembly plant in Spring Hill, Tenn. The factory, which used to build cars for the now-defunct Saturn brand, was put on standby in 2009, around the time of the automaker’s bankruptcy. Jobs also will be added to GM plants in Warren and Romulus, and in Wentzville, Mo.

Details yet to be confirmed

Under the proposed contract, GM’s profit-sharing formula will be easier to decipher, and be based on the automaker’s North American profits — not U.S. earnings. UAW leaders also say the agreement protects retiree pension plans and improves health care benefits — two items they fought for in talks this year.

Of course, the devil is in the details, and GM workers are eager to learn more about what’s in the contract, their local union leaders say.

Local leaders will travel to Detroit on Tuesday for a briefing on the agreement, and they’ll then take it back to their members.

Some GM workers said they are encouraged that a tentative agreement was reached about 48 hours after the actual deadline. Workers at all three Detroit auto companies are operating under contract extensions until new pacts are signed.

Not everyone, however, was happy. Some said Sunday the $5,000 signing bonus is disappointing, and they had hoped union leaders would eliminate the entry-level tier, whose workers are paid about half what veteran workers get.

“It was kind of a shock,” said Jose Facundo, a 33-year-old worker at GM’s Lansing Delta Township plant. “We thought we’d get more.”

The signing bonus, he said, pales in comparison to all that GM workers gave up in recent years, including pay raises and cost-of-living increases.

The second-tier wage also is a sticking point for many workers, and a deal-breaker for Facundo.

Even with the pay raise, entry-level workers still make far less than veterans working next to them on the line, a disparity that breeds resentment among the rank-and-file. A tier-one worker starts at about $28 an hour.

“I have a feeling there are going to be a lot of ‘no’ votes” because of the pay discrepancy, Facundo said. “I’ll probably vote no myself.”

Chrysler could take weeks

Ford and Chrysler are closely watching the GM developments.

UAW President Bob King is expected to turn his attention to Chrysler next, despite last week’s dust-up with CEO Sergio Marchionne, who criticized King, in a letter, for not meeting with him Wednesday. As the contracts expired at both GM and Chrysler, King was with GM bargainers.

Talks at Chrysler could take a couple weeks to finish. King will have to spend much of this week helping sell the GM pact to workers. Marchionne is due back from Europe early this week.

Union leaders at Chrysler likely will push to reopen some of the half-dozen plants shuttered during bankruptcy in 2009. They’ll also seek assurance that Fiat SpA, Chrysler’s majority owner, will keep car production at U.S. factories, analysts say.

The angry letter from Marchionne also is a sign the two sides weren’t close last week, Dziczek said.

“Bob (King) is not the kind of guy to engage in a public battle like this letter from Mr. Marchionne, but that doesn’t mean he is just taking this lying down,” she said.

For the most part, Chrysler workers were pleased with what they had heard about the GM contract, and are hopeful their leaders will be able to negotiate similar terms.

“Everything looks likes it’s pretty good,” said Joe Simon, a worker at Chrysler’s Trenton Engine Complex. “Putting people back to work is the number one issue. But we have some other issues at Chrysler that we need to take care of, like shift rotation. That is just killing us.”

Ford bargainers are expected to finish last, but the union also has the most leverage there. Many Ford workers feel that since they helped their company survive without taxpayer money, they should be more richly rewarded.

Typically, talks with the third company can drag out for more than a month; with Ford lacking a no-strike clause, the labor talks may stretch well into October, analysts say.

“They are looking to sweeten the pot at Ford,” said Rebecca Lindland, an automotive analyst with IHS Global Insight.

“The three companies are not the same anymore. It’s an error to think that the cookie cutter contracts of the past are going to work for all three companies anymore.”

Joe Leller, who works at Ford’s Dearborn truck plant, said many of his co-workers are dissatisfied with what the union got from GM.

A $5,000 signing bonus would result in $2,800 after taxes, he figures, and does not compensate for thousands of dollars in concessions workers made to help save the Dearborn-based automaker.

“Many of us at Local 600 are pushing for a strike and will be voting ‘no’ on this package,” Leller said, describing the proposal as “silly.”

Brian Pannebecker, a worker at Ford’s Sterling Heights plant, agrees a $5,000 signing bonus may not be enough at Ford, but he backs the pay bump for second tier workers and is encouraged by GM’s promise of new jobs.

He added: “New jobs are the most important issue.”

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Additional Facts
The GM agreement
$5,000 contract signing bonus
A $2-$3 an hour wage increase for entry-level workers; new hourly pay range for the so-called second tier of $16-$19.
New jobs at GM plants in Warren, Romulus and Wentzville, Mo.; GM’s assembly plant in Spring Hill, Tenn. will reopen
A richer, more transparent profit sharing formula based on GM’s North American profits, not its U.S. earnings
Protects retiree pension plans; improves health benefits

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