Job guarantees seal deal for Gettelfinger

David Barkholz
Automotive News
September 26, 2007 - 6:34 am EST DETROIT -- UAW President Ron Gettelfinger says the union’s new agreement with General Motors improves the carmaker’s North American competitiveness while guaranteeing jobs and the future of retiree health care.

The agreement, reached 40 hours after the UAW called its first national strike in 37 years, promises GM investment products for U.S. plants.

Gettelfinger early this morning said provisions in the agreement “would stem the flow of jobs” from GM’s U.S. factories.

Though he wouldn’t be specific, employees at GM assembly plants in Lordstown, Ohio; Spring Hill, Tenn.; and Kansas City, Kan., have been relying on Gettelfinger as part of the negotiations to secure new vehicles to replace vehicles they are losing or have lost.

That was a key sticking point in unrelenting negotiations that have been going with only nightly breaks since the current four-year contract expired at day’s end on Sept. 14.

In return, GM gets concessions aimed at closing what the Detroit 3 say is a $20-$30 per hour labor gap with their Japanese competitors in North America.

A new health care trust that moves GM’s $50 billion in retiree health care liabilities off GM’s books gets the carmaker about half way to that goal, industry analysts have said.

Gettelfinger says a new Voluntary Employee Beneficiary Association will be funded by GM in such a manner that he can guarantee its solvency for at least 80 years.

Other provisions in the agreement will shave additional costs from car production to help GM compete, Gettelfinger said.

The agreement includes a signing bonus and a provision that would allow temporary employees to be made permanent starting at their current wage of $18 per hour, said a source briefed on the details. Veteran production workers earn about $28 per hour.

The conversion of those temporary workers to permanent at the lower wage institutes what is known as a tier-two wage structure. The UAW traditionally has balked at allowing the auto companies to pay different wages to union workers in the same plant.

The source said GM also plans to offer another early-retirement and buyout to workers. It won't be on the scale, however, of a buyout that saw nearly 35,000 take the package about a year ago.

Along with the signing bonus, the agreement calls for a wage increase of 3 percent in the second year, 4 percent in the second year and 3 percent in the third, the source said.

The agreement must still be ratified by about 73,000 UAW-represented workers at GM in the coming days.

UAW Local 652 President Tiny Sherwood said job guarantees were the most important issue to the members he represents at GM's Grand River plant in Lansing. The plant makes Cadillac sedans and the SRX crossover vehicle.

"Without the jobs, what good are the benefits," he said.

Sherwood has watched over the years as hourly employment at the operation has fallen from 14,000 in 1985 to less than 3.000 today.

He said that without job guarantees and new investment, it was unlikely that his members would have ratified the agreement. "This is something we can really sell," he said.

The UAW must now choose between Ford Motor Co. and Chrysler LLC as the next target of negotiations.