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Union Approves Labor Pact With General Motors

American Government Special Collections Reference Desk

Topics:  General Motors, UAW

Union Approves Labor Pact With General Motors

VOA Breaking News
September 28, 2011 at 3:31 pm


The United Auto Workers labor union has approved a new four-year contract with General Motors, the largest U.S. car manufacturer.

The deal covers more than 48,000 workers at GM, and could set a precedent for the union's upcoming negotiations with two other U.S. automakers, Ford and Chrysler. While most U.S. labor union agreements with corporations focus on pay increases for workers, the auto workers agreed with GM to trade guaranteed wage boosts in exchange for potentially bigger profit-sharing payments if the company's earnings continue to be robust.

UAW officials said Wednesday that nearly two-thirds of its members who voted on the pact approved it. Under the deal, the workers will get between $12,500 and as much as $25,000 in one-time and profit-sharing pay over the life of the contract, including an immediate $5,000 bonus for signing it.

The deal also calls for GM to hire an additional 6,400 workers, most of whom are expected to be assigned to low-wage positions. At the same time, GM plans to buy out 17,000 long-time workers with higher salaries, paying them up to $75,000 to leave the company.

In all, analysts say GM's labor costs will only increase by about 1 percent under the deal. The firm went bankrupt in 2009 at the height of the U.S. recession, but the U.S. government poured nearly $50 billion into the company to keeping it running. Now the company is profitable again, earning $4.7 billion last year, and has repaid a large portion, but not all, of the government aid.

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