GM deal appears ratified, but skilled trades delay it

Greg Gardner
Detroit Free Press
Greg Middleton, a GM employee for 28 years, marries the chassis to the body of a 2015 Buick Enclave Thursday, April 30, 2015 at the General Motors Lansing Delta Township Assembly plant.

Skilled trades workers threw a monkey wrench Friday into what appeared to be a ratified contract between the UAW and General Motors, causing at least a few days' delay in signing bonuses, raises and other benefits for about 52,700 workers.

Late Friday night the UAW released the results: 55.4% voted yes and 44.6% voted no.

But the agreement isn't ratified because skilled trades workers — the electricians, millwrights, welders and pipefitters who fix machinery when it breaks down — hated the deal and 59.5% of them voted no. They object to language that enables GM to continue reducing the number of their classifications and ask them to do jobs beyond their trained specialty. They also were not eligible for a $60,000 retirement incentive that up to 4,000 production workers can take, based on seniority and age.

Ford and UAW reach rich tentative agreement

Under UAW bylaws, union leaders are obligated to hear the skilled trades' complaints in light of their overwhelming rejection. That will happen in a series of meetings. Until then, UAW President Dennis Williams can't give GM formal notice that the contract is ratified.

"The UAW will hold meetings with its skilled trades membership at each GM worksite over the next several days in order to determine what reason(s) they had for rejection of the tentative agreement," the union said in a statement Friday night.  "Once that inquiry has concluded, the UAW's International Executive Board shall meet to determine what appropriate steps shall be taken. The results of this process cannot change aspects of the agreement which are common to all members."

Despite skilled trades' resistance, 58% of GM's UAW production workers approved the deal.  Support came from both veteran workers, who will get their first wage increase in 10 years, and younger workers who will get better health care coverage and a path to wage parity in three to six years, depending on their hire dates.

Many workers at four former Delphi parts plants were unhappy because their wages are capped at a lower level than people in assembly, power train and stamping plants, but some can transfer to those plants as openings occur in their regions.

UAW pact with GM is on the road to ratification

Under the new contract about 57,200 GM hourly workers will receive an $8,000 signing bonus and wage increases. Entry-level production workers currently paid between $15.78 and $19.28 per hour will see their wages increase to between $17 and $22.50 per hour and eventually will earn about $29 per hour.

The Tier 2 workers also would get the same health care coverage as other  workers hired before October 2007. That coverage has no deductible and extensive benefit coverage.

The non-Tier 2 workers would receive 3% raises in the first and third years of the contract and 4% lump-sum bonuses in the second and fourth years of the agreement.

While Williams declined to comment on the GM contract vote, he was confident enough in its ratification that he spent most of the week hammering out final details of an agreement with Ford that was announced Friday afternoon.

Getting the GM deal approved in one round of voting contrasts with the situation at Fiat Chrysler, where the pact was initially rejected. One of the winners from the smoother result will be Cindy Estrada, vice president of the union's GM department, and a potential candidate to succeed Williams if and when he retires.

After FCA workers rejected their initial agreement, the union brought in an outside firm, BerlinRosen, to sharpen messaging. Estrada encouraged members to freely express their opinions on social media even if they opposed the agreement.

"The UAW improved their communications strategy," said Art Wheaton, director of labor and environmental programs at Cornell University School of Industrial and Labor Relations. "There’s no hidden panels or death squads."

Williams, Estrada and the UAW bargaining committee took criticism from various factions.

Times are good. The union built up expectations that "this is our time." GM made a $8.3 billion pretax profit in North America in the first nine months of this year.

Many workers wanted to regain all wages deferred and benefits lost during GM's near-death experience and 2009 bankruptcy. That didn't happen.

"What does the American dream look like in today's world, especially for the young people coming out of high school without the economic wherewithal for college?" said Mike Warchuck, president of UAW Local 653 in Pontiac. "That's what we're fighting to improve.

"Our temporary employees never had health care before. Now they will be eligible for coverage."

Jennifer Sanders is a recently hired worker at GM's Flint Truck Assembly plant.

"I'm pleased with the health care changes, but mostly I see job security as our biggest concern," said Sanders, who was laid off earlier this year from the Orion Assembly plant because of  declining sales of the Chevrolet Sonic and Buick Verano. "I'd like to get to the full Tier 1 wage right away, too, but if you give me a raise today and then send my job to Mexico next year it doesn't matter."

Other workers complained about GM's expanding use of temporaries and the union's failure to establish a time limit on their service before they are made permanent.

The relatively close vote works to each side's advantage. UAW leaders had to push harder for rank-and-file support. Management can tell Wall Street GM didn't jeopardize competitiveness through an overly generous contract.

Workers at GM who received $9,000 profit sharing, before taxes, early this year based on 2014 profits, stand to receive equal or slightly better payouts next spring based on North American pre-tax profit.

Yet cost-cutting pressure and the push for flexible manufacturing won't let up even as new vehicle sales are approaching levels not seen since 1999 and 2000.

GM's profit in the U.S., Canada and Mexico more than offsets losses in Europe and South America, as well as slowing growth in China.

But the future of transportation is changing faster than ever. GM and its competitors are investing in new mobility ventures, including ride-sharing and fully autonomous cars. Those projects likely won't result in the same robust profit margins as pickup trucks and luxury cars.

"Our membership is enlightened enough to understand that you can't roll back the clock to where things used to be," said Warchuck.

Contact Greg Gardner: 313-222-8762 or Follow him on Twitter @GregGardner12

GM UAW Contract Votes - Google Sheets