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GM-UAW pact bodes well for the automaker’s future

Published: Thu, September 22, 2011 @ 12:00 a.m.

General Motors Corp. and its union employees should not be surprised if public reaction to the four-year tentative contract is less than enthusiastic. After all, the idea of a corporation, saved from extinction with an infusion of billions of taxpayer dollars, granting bonuses in the midst of a national economic recession is difficult to comprehend.

Which is why it’s helpful to view the agreement within the context of General Motors’ future plans, which are certainly encouraging. The 48,500 UAW members who work for the leading American automaker will be voting on the tentative agreement in the near future. And as the details of the pact emerge, the public will see that labor-management relations are key to GM’s economic viability.

According to the Detroit News, the proposed contract will result in 6,400 saved or added jobs and $2.5 billion in additional investment in the United States.

Indeed, in addition to reopening the former Saturn assembly plant in Spring Hill, Tenn., and boosting operations in plants in Warren, Mich., Wentzville, Mo., and Saginaw and Fort Wayne, Ind., the company plans to build a new compact car at a site that has not been disclosed. It will add or retain 500 jobs, the Detroit News reported.

While there was no mention of the GM’s Lordstown assembly plant, which is operating three shifts and producing the Chevrolet Cruze, the top-selling compact car in the nation, we are confident the decision makers in Detroit have taken notice of what’s going on in the Mahoning Valley.

There have been persistent reports that GM is planning to build a diesel model of the Cruze.

The Cruze has not only surpassed all sales projections, but the quality and engineering of the car have drawn rave reviews. If General Motors intends to build another compact model, it would be worth its while to consider the Lordstown plant. Management and labor have developed a working relationship that has become the standard for the company.

Profit sharing

As for the details of the four-year labor pact, there will be a $5,000 signing bonus, profit sharing as high as $12,000 and $1,000 inflation- protection lump sums paid out in 2012, 2013 and 2014, according to the United Auto Workers. There is an additional $250 yearly award for meeting quality targets.

Entry level wages would increase to $19.28. About 4 percent of GM’s workforce is made up of tier-two workers who earn $14-$16 an hour. Veteran employees earn about $28 an hour.

These are crucial times for GM, and by extension, the Mahoning Valley because of the importance of the Lordstown plant to the region’s economic well being. The automaker’s profitability depends on a lot of factors, foremost of which is a stable labor climate. The agreement that will be voted on at the various plants provides such an environment.

The federal government has received $6.7 billion from GM in loan repayments, and currently has a 26.5 percent stake in the company. It had owned $2.1 billion in preferred stock and a 60.8 percent stake, but sold about half in an IPO last year.

Therefore, it is to the benefit of American taxpayers that GM keep making money so the value of its shares increases.

The contract bodes well for the future of the company.


1TylerDurden(367 comments)posted 4 years, 10 months ago

Not one mention of the fact hat GM will not have to pay income taxes for the foreseeable future.
How does that fact bode for the American taxpayer?
Try doing some actual research and forming an intelligent synopsis of the entire situation.
Making millions in profit, tax-free, seems a little unfair to the taxpayers.

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2redvert(2240 comments)posted 4 years, 10 months ago

So let me see, the UAW seems to have really got a super deal with Government Motors. So who do the bosses at Government Motors take orders from? Now I understand!!!

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3taxpayer1001(274 comments)posted 4 years, 10 months ago

The high wages and perks are what got them into trouble to begin with. The payroll tiers were something that actually helped bring them to a stable entity and now they are going to continually jack up the payroll all over again. Go figure.

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4TylerDurden(367 comments)posted 4 years, 10 months ago

The companies that received TARP funds were given a back room sweetherat deal if they filed bankruptcy thereafter. The bankruptcy laws were circumvented to allow a Net Opertaing Loss to remain on the books after bankruptcy. This is a huge dedcution GM will be allowed to take forward 20 years, if it lasts that long.
That means the people in charge knew they could keep this loss and certainly had the opprotunity to make it bigger before filing bankruptcy.
An absolute kick in the groin to investors and shareholders. Blatant fraud in my opinion. Knowingly burning through money in order to make a tax deduction bigger with no risk to the company, unless you owned stock or were a bondholder.
A present day atrocity.


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5essen(9 comments)posted 4 years, 10 months ago

Tyler is 100% correct. Obama circumvented bankruptcy law to favor the UAW, and screw investors.
The loss carryforward that they were allowed to keep gives them an unfair advantage over Ford, who did not take taxpayer dollars. I will never, ever buy a GM product, which is a shame for them, because it looks like they are making some pretty decent cars now, unlike the crap cars they built in the 70's, that the UAW workers puposely sabotaged, turning million of American to swear off ever buying American again. $5000 signing bonuses, paid by for the American taxpayer. Hey, Betram, where is the outrage? Or do you just save your vitriol for YSU professors?

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6cambridge(4150 comments)posted 4 years, 10 months ago

When GM went bankrupt bush was the president. Since Ohio is a welfare state receiving back every dime sent to Washington in federal income tax plus an additional 5% none of the money loaned to save GM and Chrysler came from Ohio.

In fact not a dime of Ohio's federal income tax contributes to the military, the EPA, FEMA, FDA, NASA, FAA. federally funded medical research, the wall street bail out, the current Obama jobs program or any other federal government program. The people of Ohio only benefit from all these programs and others without paying a dime for any of them.

You could at least say thank you.

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7essen(9 comments)posted 4 years, 10 months ago

You should thank New Jersey. We only get one half of our federal dollars back, last in the nation. The only thing we get from Ohio is acid rain.

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