According to a letter to local union presidents and chairpersons sent out on Friday, the Untied Auto Workers (UAW) has agreed to extend its existing contract with General Motors until November 20th as the two organizations continue to hash out issues brought up by skilled trades workers over the tentative new agreement.
Extending the existing GM-UAW labor contract, which was agreed upon in 2011, is unprecedented, and is the result of the majority of skilled trades workers voting against the tentative new labor contract a week ago despite the majority of GM-UAW workers approving the deal.
“We continue to meet with the company and will keep you updated as we work through the process”, Cindy Estrada, UAW Vice President and UAW GM Vice President, wrote in the letter. “I realize this has been a long and difficult process, but it is important we address these important issues raised by the skilled trades. The strength of our union is our process and the solidarity we exercise with our brothers and sisters who work in the trades.”
Estrada also said that the new deadline for ratifying the new labor deal is November 20th. Friday, November 13th was the prior deadline.
UAW President Dennis Williams said in a statement released Friday that based on the feedback from skilled trades members, he has “determined that further discussion with the company was needed. Such discussions are currently taking place.”
Neither Estrada nor Williams provided specifics about the union’s talks with General Motors, or discussed the changes that could be made to the new contract, or how.
General Motors’ statement also didn’t mention any specifics: “General Motors is working with the UAW to address issues raised by skilled trades workers. We remain committed to obtaining an agreement that is good for employees and the business.”
However, industry observers have boiled the options going forward down to the following three:
- The UAW wins concessions for skilled trades people from GM, or
- The two parties clarify language via an addendum to the contract, which would not require another vote by GM UAW members
- UAW leadership overrules skilled trades’ votes and ratifies the deal
GM-UAW 2015 Contract Background Info
The New Contract
Though details of the new tentative agreement will not be made public until the deal is ratified, here are the unofficial details we have been able to gather:
- Workers hired before 2007 would receive 3 percent raises in the first and third years of the contract and 4 percent lump-sum bonuses in the second and fourth years of the agreement.
- Lump-sum payments would be four percent of annual pay, the same as FCA. It’s likely that GM workers wanted this number to be greater given GM’s larger size and profitably.
- All hourly employees get a signing bonus of as much as $8,000, higher than rival FCA, whose hourly workers get a $4,000 signing bonus.
- GM workers would keep the outgoing contract’s profit sharing structure of $1,000 per $1 billion in GM North American profit. Some outlets have reported the bonus structure as being of “$1,000 and an additional $500 bonus when quality metrics are reached”.
- To note, GM paid an average of $9,000 to the average UAW member in profit sharing in 2015 alone, according to the Center for Automotive Research.
- Up to 4,000 eligible employees would be offered a $60,000 early retirement incentive.
- The pay gap between veteran workers and new hires will gradually be eliminated, thereby allowing entry-level, or two-tier workers to reach a top wage of about $29 an hour in eight years. For instance, entry level production workers currently paid between $15.78 and $19.28 per hour would see their wages increase to between $17 and $22.50 per hour and would eventually earn about $29 per hour.
- One of the most controversial aspects of the proposed agreement is to pay workers at GM Components Holdings a lower pay rate than other workers. A group of about 3,400 hourly workers at several GM parts plants with one to four years of seniority would be paid $16.25 to $19.86.
- GM will invest $1.9 billion in U.S. facilities, creating or retaining 3,300 jobs at 12 plants.
On November 6th, the UAW announced the following voting results on the new 2015 GM labor contract, which impacts about 52,600 hourly workers at GM’s U.S. plants:
- 55.4 percent of GM union members overall voted “yes” on the tentative agreement
- 59.5 percent of skilled trades workers voted “no”. The skilled trades are made up of positions such as welders, and represents about who represent about 16 percent of GM’s 52,600 workers.
Voting & Ratification Intricacies
Both skilled trades and production workers must approve the deal separately for it to be ratified. However, the UAW can overrule a rejection by skilled trades workers if the union’s International Executive Board finds that skilled trades voted against the deal for reasons that are not unique to their classification.
In addition, the UAW has stated that it cannot change aspects of the agreement with GM that are common to everyone based on the findings of its investigation with skilled trades.