Why GM’s tentative contract isn’t a ‘win/win’ for the rank-and-file

Why GM’s tentative contract isn’t a ‘win/win’ for the rank-and-file
Automotive News | September 18, 2011 – 3:22 pm EST

Pundits have called the new UAW and General Motors contract a win/win. I’ll amend that to win/win/lose.

I agree that GM and the international union won. They met their goals.

But the contract is a loser for GM’s 49,000 rank-and-file.

What happened to the $7,000 to $30,000 in concessions since 2007 that the workers were going to clawback from a very profitable GM?

The new contract has no wage increase for traditional workers and no restoration of a cost-of-lving allowance.

Instead they’ll receive a $5,000 signing bonus and an improved profit-sharing plan that includes profits from global operations, where hundreds of thousands of GM jobs have gone, rather than just U.S. profitability.

Keep in mind, the $5,000 signing bonus is for four years. That’s $1,250 a year or 2 percent of a straight-time annual wage of $58,240. That won’t even keep up with the rate of inflation. And unlike inflation, a signing bonus doesn’t compound.

Because Detroit 3 hourly workers have not had a raise since 2003, the $58,240 a year they earn is worth 20 percent less today in inflation-adjusted dollars. They also gave up COLA in 2009.

Excuse the hourly at GM if they’re not high-fiving this deal. If it is ratified, and I believe it will be a tight vote, it is only because they can’t strike and they might get no better in binding arbitration, where transplant compensation is considered.

I don’t think this contract would have a snowball’s chance of passing at Ford Motor Co. The 41,000 hourly there can strike and they expect some clawback.

For GM, the deal is great. GM negotiators avoided raising fixed costs and the carmaker can share a tiny fraction of future profitability with workers. If there’s no profits, no profit-sharing.

UAW President Bob King benefits because the deal went smoothly and he can point to the process as proof to the transplants that the union has changed its stripes to cooperative partnership. He believes he needs that image to organize them.

The one raise in the contract is for entry-level workers: up to $3 an hour that brings their annual straight-time wage from $29,120 to $35,360. There are less than 5,000 of those so a nominal cost to GM.

I know the argument from union critics. GM workers should just be happy they have jobs. Possibly. They are so few today vs. 20 years ago.

Then there’s the other silver lining — the jobs GM has shipped overseas are creating profits that U.S. hourly workers can now participate in.

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