UAW contract: GM saves 50% on new workers
New hourly workers will cost General Motors Corp. half as much as current workers under the new United Auto Workers labor pact, the U.S. automaker said Monday.
The four-year contract will transfer an estimated $46.7 billion worth of retiree healthcare liability to the union from the company, GM said.
The deal clears the way for landmark changes GM says will slash labor costs and cut retiree obligations to $18 billion from $64 billion, saving the automaker billions of dollars.
GM Vice Chairman and Chief Financial Officer Fritz Henderson said in a presentation the new contract meant the company could move 56,000 current UAW members, or 75 percent of its current UAW workers, into retirement.
Many of those legacy workers could be replaced by "non-core" workers making total wages and benefits of $25.65 an hour, compared with $78 an hour on average under the old contract, The Detroit News reported.
While many workers hired at the lower-tier wage could move into higher-wage jobs on the assembly line, they would not get costly defined-benefit pension plans or retiree healthcare promises, Henderson said.
The cost savings GM realizes from expanded use of temporary workers and lower-wage permanent workers will come on top of an estimated $2.6 billion to $3.4 billion the automaker expects to save by 2011 because of the UAW's agreement to shift GM's existing retiree healthcare costs to a union-managed trust, the newspaper said. // Copyright 2007 by United Press International
- Competition Heats Up for Electric Vehicles, Chevy Volt
- Pontiac will be gone by the end of next year
- GM floods Internet with Chevrolet Malibu ad banners
- UAW contract: GM saves 50% on new workers
- Toyota plug-in hybrid to hit the roads
- America’s big three to hold contract talks with the UAW
- Quantum Fuel Systems reports drop in revenues
- GM Will Buy 50 Percent Equity Interest in VM Motori
- Debut at NAIAS: 2008 Nissan Rogue Crossover SUV
- Renault Magnum shifts dimensions in 2008
- NAIAS Debut: 2007 Toyota Tundra CrewMax full-size pickup
- Opel Astra: More powerful and over 13 percent more economical
- Renault Megane F1 Team R26 in Depth
- Opel Corsa OPC world premiere in Geneva
- 2009 Honda Civic lineup receives new exterior styling
- New 2008 Dodge Viper SRT10 at NAIAS
- Volvo XC60 Concept at NAIAS
- Renault Megane Renault Sport dCi debut at Geneva