Here’s The Most Likely Reason GM Didn’t Offer Retirement Incentives To Skilled Trades Workers In 2015 Labor Contract
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General Motors Company and the United Auto Workers (UAW) union are discussing details and language of a new labor agreement impacting 52,600 workers across GM’s U.S. manufacturing facilities. Specifically, the two organizations are focused on issues brought up by skilled trades workers — the electricians, millwrights, pipefitters and diemakers — the majority of whom voted against the deal due to a multitude of issues, thereby delaying the ratification of the new agreement and resulting in the extension of the old, 2011 deal.
One of the most prominent points of contention skilled trades have with the new contract is that it does not offer skilled trades the $60,000 retirement incentive as it does to 4,000 production workers. That could be because over half of GM’s 8,500 skilled trades workers are eligible to retire and, if given a financial incentive, the majority of skilled trades would probably elect to do so, thereby resulting in major operations issues at some GM plants.
For instance, 59 percent of skilled trades workers at GM’s Arlington plant have 30 years or more of service and could elect to retire at any point.
“They could walk right out the door,” Pruitte, a skilled trades electrician, said in an interview with The Detroit News. “It would just shut this operation down.”
GM-UAW 2015 Contract Details
The New Contract
Though details of the new tentative agreement between GM and the UAW 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.
Voting
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, but…
- 59.5 percent of skilled trades workers voted “no”. The skilled trades are made of positions such as welders, who represent about 16 percent of the 52,600 work force.
As such, even though the majority of GM UAW members overall supported the tentative agreement with 55.4 percent voting for its ratification, it could not be ratified immediately since 59.5 percent of skilled trades workers opposed the deal.
Ratification Requirements
Both production line workers and skilled trades have parts of the contract tailored to their classifications. For the deal to be approved, both skilled trades and production workers must ratify the deal separately.
The UAW can overrule a rejection by skilled trades workers if the union finds they voted against it for reasons that are predominantly economic and not unique to their classification.
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