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It appears that the UAW and GM have reached a tentative deal
on a new four year contract. The initial buzz is that it a win-win situation
for both the UAW and GM. Since no details have been officially announced, we
have to settle for some carefully leaked rumors.
I have maintained that the auto companies could not add to
their fixed costs of producing cars but it appears GM did just that by agreeing
to raise the wages for new hires by $3 / hour which does not appear to be a
great deal BUT it still adds to the fixed cost of building an auto.
Enlarging the profit sharing formula was expected and should
have been the only concession of GM.
Also expected was a promise to invest in U.S. plants and not to outsource which is a huge
deal for job security for U.S.
Giving all workers a signing bonus of $5,000 was a mistake
even though it does not add to fixed costs. It could actually help the local
economy as workers blow $5,000 on “stuff”. It was a mistake because I did not
read about any concessions on the UAW part such as higher co-pays in their
healthcare coverage, etc.
Usually, what is agreed with one company (GM) is now offered
to Ford and Chrysler to accept and in this way all UAW workers get basically
the same.
Since the American taxpayer bailed out GM and Chrysler and
for that matter, the UAW, I do not see this as a fair contract where with
unemployment up in Michigan
GM should have stuck to giving the UAW job security and a
bigger profit sharing slice and that should be enough for the union in these
tough economic times.
I hope Ford and Chrysler work out their own contracts
without increasing wages for new hires and no signing bonus; just be grateful
you have a job!
I will be waiting for the fallout to come…
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