GM, Ford, Fiat Chrysler labor costs rise in new pacts

Labor costs for the Detroit vehicle makers would rise significantly under tentative agreements with the United Auto Workers union, say two research firms, undoing much of the savings achieved by the companies over the last eight years.

As previously noted, while the majority of the entire UAW-GM membership voted in favor of the tentative agreement – 55.4 percent in favor versus 44.6 percent against – the skilled trades membership voted against ratification.

General Motors said in a statement it is pleased the UAW has ratified the national agreement “which is good for employees and the business”.

The review of skilled trades workers concerns found they had issues pertaining to local contract agreements, reclassification of trades, numbers of apprentices, concern over outsourcing or loss of jobs and the absence of cost of living increases and buyouts.

“Following discussions with GM, the parties agreed to changes that protect core trades classifications and seniority rights”, according to a UAW press release.

The union’s governing body, the global Executive Board, composed of Williams, vice presidents and regional directors, approved the agreement today. A week ago, the union announced a rarity, extending the contract ratification deadline through Friday as talks with GM about skilled trades concerns continued; the original ratification deadline had been November 13.

The union’s constitution requires passage by both production and skilled-trades workers for ratification, but allows the worldwide Executive Board to override a no vote. The outcome has been in limbo for two weeks since a majority of hourly workers approved it despite the skilled-trades workers’ objection. About 20 percent of GM’s hourly UAW workers fall under the lower-paid Tier 2 wage scale.

While proposed raises will take effect Monday, the two-week extension delayed payment of $8,000 signing bonuses for 52,700 GM workers until after Thanksgiving and the Black Friday weekend. That spending should “create and/or retain” more than 3,300 jobs, the UAW said.

The delay has led to a few tension between production and skilled trades workers, with a few production workers upset because they wanted their $8,000 ratification bonuses sooner. There are also annual lump sum performance and quality bonuses, and a $60,000 bonus for up to 4,000 eligible production employees who retire between February 1 and May 1, 2016. Ford Motor Co. hourly members wrap up voting Friday on their tentative agreement, which could be defeated based on results thus far that indicate “yes” votes are trailing “no” votes.