In a research report yesterday, JPMorgan auto analyst Himanshu Patel analyzed the impact of GM's new UAW contract on the automaker's finances. The report focused on the minor increase in GM's labor costs, and dug into possible future pension savings and the number of lower-paid, so-called Tier 2 new hires that GM will bring on as higher-paid current UAW members retire or take buyouts.
Overall, Patel gave the contract a thumbs-up for GM's finances.
But it was a different line-item change that caught my eye.
Under the new contract, GM no longer will offer free legal services for UAW members. This is one of those special perks that are evaporating in today's harsh economic climate. UAW members used to get free legal help with writing wills, divorcing spouses, refinancing mortgages and all those other matters where a lawyer is needed.
We're talking run-of-the-mill legal issues here, not hiring white-shoe lawyers to offer advice on a multibillion-dollar hostile takeover. Even so, those billable hours add up.
Patel says eliminating the perk will save GM $50 million in the few months remaining this year, then $145 million in 2012 and again in 2013.
I would argue that after cutting this helpful perk offered to its blue-collar workers, GM should consider doing the same with its white-collar staff.
Or how about its directors? Surely GM could find a perk worth $145 million a year that it offers its directors that could be axed. If a GM director whines about losing some perk that basically doubles up on a similar perk from his or her primary employer, then go find a replacement director.
But that's a debate for another time. My point: There are a lot of extra goodies that employees across America used to get, which now are being cut. Now that applies even to the UAW.
And if GM can spend that $145 million on making its cars and trucks more competitive so that it sells more vehicles and needs to run its factories at higher rates with more workers earning more overtime, that's the best perk the men and women on the line could ask for.