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

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.”

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