Under the new UAW national agreement, General Motors and Ford retirees will no longer receive a bonus from the two automakers.
As the Detroit Free Press reports, the 2015 national agreement between the worker’s union and the automaker entitled GM retirees to a one-time payment of $500 after retirement, while Ford retirees received $250 per year for four years, or $125 per year for four years for their surviving spouses.
However, with automakers looking to reduce their “legacy” costs, the retiree bonuses have been swept away. While Fiat Chrysler Automobiles has yet to agree on a contract with the UAW, the deals reached with GM and Ford will be used to frame the discussions, and neither of those contracts included retiree bonuses. The Detroit Free Press reports that combined, the Detroit Big Three have more than twice as many retirees as they do active hourly workers, so the costs of having a retirement bonus can add up. UAW retirees may still pay union dues which entitle them to certain UAW services and benefit programs, but they aren’t allowed to vote in the contract ratification process.
“Any bonuses or gains for already-retired people are permissible, but not mandatory,” Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, told the Detroit Free Press in an interview. “The union can ask and the company can say no. Retirees aren’t voting on the agreement. If there is a need to put more money in the pockets of people who are going to vote on the agreement, then they will do that.”
Under the new national agreement, active UAW GM employees will receive a ratification bonus of $11,000 (temporary workers who have been with the company for at least 90 days will receive $4,500) in addition to a 3-percent wage increase and 4-percent lump-sum payment on alternating years of the four-year deal. The Detroit-Hamtramck Assembly plant will also stay open under the 2019 agreement, with GM preparing to allocate electric truck and SUV production to the plant.
Source: Detroit Free Press