General Motors and the United Auto Workers have officially inked a new labor agreement that will span through 2013. In short, the contract will cover roughly 48,500 hourly GM employees, and is expected to increase the company’s labor costs by 1 percent annually, totaling $215 million through 2013.
Most of the increased labor costs will go towards the new $5,000 signing bonuses set in place for workers, and cover buyouts of up to $75,000 for skilled trades workers. After that, GM expects the labor costs to rise only $20 million for 2012 and 2013 compared to the previous labor agreement.
The UAW and GM also agreed on no pension increases, a capping of the hourly defined beneficiaries to the pension plan population and the cancellation of free legal services for workers.
Additionally, a new profit sharing plan based on the company’s financial performance will be put in place, as will quality-based bonuses based on initial quality studies of vehicles.
As reported earlier, second-tier wage employees will be able to earn an pay increase of up to $3-an-hour but they will also see a payment of $1,000 in lump-sum annual bonuses.
The new deal increases GM’s labor costs by the slimmest margin in four decades, but do you think it’s a good deal? Sound off in the comments below!