A new four-year contract has been approved by factory workers at General Motors. The new contract promises thousands of new jobs and includes profit-sharing benefits instead of raises for most workers. The United Auto Workers union said that 65 percent of production workers and 63 percent of skilled-trades workers, such as electricians, voted for the deal.
The new contract was the first one approved by the union, which is also negotiating with Ford Motor Company and Chrysler Group. The contract sets guidelines for the pay and benefits of more than 112,000 auto workers across the nation and influences pay at foreign-owned auto plants in the U.S., auto parts supply companies, and other businesses in the manufacturing industry.
Under the deal, most workers will get $5,000 signing bonuses, profit-sharing checks, and other payments that total $11,500 or more during the next four years. The contract also compensates workers for meeting quality standards. At least 5,100 new jobs are expected to be added by the company and entry-level workers who make a base wage of around $15.78 per hour will get raises of 22%.
Benefits for the company are included in the deal as well. The contract calls for lowering labor costs to one-third of 2007 levels and will hold pension costs flat for the first time in nearly 60 years. The automaker will save millions in future years because the deal allows the company to stop paying for factory workers’ legal services. General Motors will also have a chance to retire older workers and replace them with new hires that cost less.
The pressure is on Ford and Chrysler to reach agreements with the union now. Optimism is high at Ford that a deal will be reached by the end of the week and negotiations with Chrysler are continuing to make progress, according to spokesmen knowledgeable of the proceedings.