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Pay raise, bonus, profit-sharing fill tentative GM pact

Published: Sun, September 18, 2011 @ 12:10 a.m.

By Karl Henkel



General Motors Co. will increase entry-level pay, simplify profit-sharing calculations and give workers a $5,000 signing bonus, according to those familiar with the newly minted contract agreement.

The two sides officially agreed to a new four-year contract late Friday after eight weeks of talks.

Dave Green, president of United Auto Workers Local 1714, which represents workers in the fabricating plant, said he’s glad the contract was resolved with little fanfare.

“I think it’s good that we got something, though a couple of days late,” he said. “I know a lot of our workers were concerned.”

The Detroit automaker will pay a $5,000 signing bonus if most of the 48,500 hourly workers successfully ratify the new contract.

Locally, that could mean an economic boost of $22.5 million based on the 4,500 workers employed at the Lordstown plants.

It is not known if the bonus will come in one payment or be spread out.

The signing bonuses, which could cost GM nearly $250 million, are much higher than the $3,000 GM gave workers in the 2007 pact.

Ratification is expected in the next seven to 10 days, according to GM.

Union and company representatives had worked under an extension since midnight Wednesday, when the previous contract officially expired.

Green said union representatives will head to Detroit on Tuesday to learn the intricacies of the new deal, then return to their home plants to discuss the contract with local workers.

Some, however, have already heard some of the new contract stipulations and aren’t too happy with them.

“People are pretty irate right now,” said Nick Waun, an assembler at Lordstown who previously worked at a GM plant in Lake Orion, Mich. “I’d be surprised if it passes.”

Waun cited two areas — no reported cost-of-living increases for Tier 1 employees, which make up about 95 percent of GM’s 48,500 workers, and the continuation of a two-tier wage system — as causes for concern.

GM, however, is expected to increase pay for Tier 2 workers by $2 to $3 an hour. Tier 2 workers, which includes entry-level and temporary employees, currently make between $14 and $16 an hour. Tier 1 workers make $28 an hour.

Green estimated that he has a couple hundred Tier 2 employees in his shop, which employs about 1,400.

“It would be good for not only our members but for our community,” he said. “The more money people make, the more they are taxed and they spend on durable goods.”

Also included in the pact: simplified profit-sharing calculations.

In March, each of the 4,500 GM Lordstown workers received $4,000 profit-sharing checks that injected an estimated $16 million directly into the Mahoning Valley economy.

The checks were a result of GM’s $4.7 billion profit in 2010, the company’s first since 2004.

GM’s profit in 2011’s second quarter was $2.52 billion, up from $1.33 billion in 2010, but the company warned against its continued profitability the rest of the year because of economic factors.

The problem, however, is that profit-sharing checks were difficult for the average member to calculate, according to those in the local UAWs.

“It will help educate our membership as to what to expect,” Jim Graham, president of UAW Local 1112 at Lordstown, said in July. “That in itself would be a good thing because there’s always speculation about profit sharing. That would just put everything to bed.”


1AnotherAverageCitizen(1176 comments)posted 3 years, 7 months ago

Good for GM and getting their contract complete.

Many ceo's took their bonuses at wall street as soon as Bush approved the bailouts. Now 3 years later GM is in good progress, why not reward employees? At least GM shares its bonuses with the workers.

Ytown615 asks "Can workers compete with the low paid Mexican & chineese workers yet?""
Are you serious? You want AMERICANS to step down to compete?

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2uetz(38 comments)posted 3 years, 7 months ago

GM has been repaying the bailout back since 2009. The U.S. and Canadian Government own a combined 72.5% of the company. Which means it's an investment. If you are that worried about them paying back their loan, please reference this bailout tracker link to see the 11 TRILLION DOLLARS, on the line from Uncle Sam (yes TRILLION, THAT'S OVER 999 BILLION X's 11) And if you want to whine and complain about them making a decent living, move somewhere else - the autoworkers contribute greatly to the economy of this area.


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3AtownAugie(764 comments)posted 3 years, 7 months ago

I've been a GM owner for 30 years, but anyone wanna buy a 2009 Silverado? I'm a Ford man after this slap-in-the-face to the American taxpayer. (Ford will ink a similar contract, but didn't beg cent one from us and thus owes us nothing, unlike Government Motors.)

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4AnotherAverageCitizen(1176 comments)posted 3 years, 7 months ago


GM got the bailout in 2008. Why are you now upset with your 2009 chevy?

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5Bigben(1996 comments)posted 3 years, 7 months ago


You made sense until this statement- - -"Can workers compete with the low paid Mexican & chineese workers yet?"

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6AtownAugie(764 comments)posted 3 years, 7 months ago

@aac ...Almost a nice try on your shot. An unsolicited suggestion: do your research before commenting so as not to embarrass yourself (again). GM's first bailout was $4 billion on December 19, 2008. -- well after the 2009 models were out.

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7dianess(1 comment)posted 3 years, 7 months ago

you know, you people kill me.. these workers who get any kind of a raise are living off the backs of the taxpayer? You DO realize that every single one of these individuals ALSO pays taxes, correct? And they also support your local businesses with the money they spend.
I am astounded that people whose retirement monies are not enough to support their lifestyle claim it is those of us who are still working who are the problem. In actuality, your pension or retirement was never intended to fully support you in retirement, and you did not have enough other equity to help. This is not the fault of the current working man or woman. Bread costs more than when you were a child, cars cost more, rent is more, etc.. labor does too.. Your beef should be with massive bonuses paid to C level managers, as well as tax aversion legislation exercised by huge corporations, not Joe or Jane Line Worker, Fireman or Teacher.

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8redvert(2151 comments)posted 3 years, 7 months ago

Citizen, Augie is fed up with his 2009 Silverado. He did not mention the bailout in that post. I think he was implying that GM built junk AFTER the bailout.

Go back and read reeeaaalll slowly!!!

That being said, since Government Motors ceo's answer to obowser, I wonder how easy it was for the UAW to get anything it wanted?

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9redvert(2151 comments)posted 3 years, 7 months ago

Yes 53, they have conveniently forgotten the stock holders that got screwed when GM had to file bankruptcy cause they were too stupid to fix their problems.

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10AnotherAverageCitizen(1176 comments)posted 3 years, 7 months ago

It amazes me that so many people slam the valley for not having good jobs. But those same people complain when someone has a good job. ( GM, Teachers) GM gives a bonus instead of a raise and people complain. The ones who say GM did not pay back their loan so nobody should be given a raise, I hope those same people do not go out to dinner or use a credit caed and still OWE the bank for a mortgage. I hope those same people don't have a mortgage and owe the bank that got BAILOUT money and still go borrow more for a car.

Hypocrites is what I call you.

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11theword(342 comments)posted 3 years, 7 months ago

What, raises are being given out in the private sector! This would never happen in the public sector the way the economy is today. I say no raises until GM pays back every penny from the bailout money they received. GM employees should take a 10% pay cut so GM can pay back all the money they owe us the taxpayer.

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12walter_sobchak(2085 comments)posted 3 years, 7 months ago

THOMAS53 hit the nail on the head! The govt bailout of GM and Chrysler was a pure payback to the UAW. The stockholders and bondholders of the old paper got screwed with no lubrication! I don't doubt that these companies are turning a profit and the unions get to share in that. They have worked hard and feel they deserve it. BUT, the govt CHOSE the winners and losers in this bailout!

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13uetz(38 comments)posted 3 years, 7 months ago

once again, complain about the small fraction that GM owes of the 11 trillion $ spent in bailout, and forget all these debts


congrats GM employees, seems like some people are too busy being miserable to know a good thing when they see it.
and im sure none of the people on here have ever filed bankruptcy, or had a family member who has? i wonder if they petition against them being able to buy a new car or a house like they do about GM EMPLOYEES who had nothing to do with the fall of the company

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