UAW VP said to endorse ratification of GM pact

The UAW's agreement with GM would establish an eight-year grow-in period for Tier 2 workers, who were hired in recent years and are paid an hourly wage of about $16 to $19, slightly more than half what their Tier 1 counterparts earn. Photo credit: BLOOMBERG
UPDATED: 11/12/15 11:17 pm ET - adds details

DETROIT -- A top UAW official is recommending to the union’s board that it ratify a tentative four-year agreement with General Motors, despite a “no” vote from skilled-trades workers, according to two people familiar with the matter.

UAW Vice President Cindy Estrada, head of the GM department, told local union officials during a conference call early Thursday that she planned to recommend that UAW President Dennis Williams and the union’s International Executive Board ratify the pact, according to two people who listened to the call.

Later Thursday, after the union's executive board met via a conference call, union officials held a second call with local UAW leaders.

Williams and Estrada told local presidents and shop chairs that they would go back to GM to clarify contract language covering the concerns of skilled trades workers before the UAW's International Executive Board made a ratification decision, The Detroit News reported late Thursday.

The paper, citing two people familiar with the union's conference calls Thursday, said the UAW has already obtained letters of clarification from GM about some language in the agreement.

It's unclear when a decision by the union will be announced.

Skilled trades workers are concerned about some local contract agreements, as well as problems with the overall GM contract, such as the lack of a buyout or retirement incentive for skilled trades workers, and the lack of cost of living increases.

Some skilled trades workers are also worried about the reclassification of plant jobs that would require them to do multiple duties and the loss of seniority or shift preferences under the contract.

There are also concerns that some factory work now covered by skilled trades could be outsourced, the News said.

Last week, the UAW said the tentative contract that was approved by a majority of GM union workers who voted couldn’t be ratified because the skilled-trades workers -- who represent about 15 percent of GM’s 52,600 UAW-represented employees -- voted it down.

The UAW’s constitution requires approval by both production and skilled-trades workers. But under the rules, the union can seek to reopen negotiations with GM only if the workers’ objections center on work rules related specifically to the skilled trades -- the elimination of job categories, for example -- rather than on wages, bonuses or other economic aspects of the pact.

Union leaders this week visited GM plants across the country to meet with local union officials and skilled-trades workers to get to the bottom of their disapproval. That process wrapped up on Tuesday.

Mix of issues

Estrada said during Thursday’s call that the skilled-trades workers’ complaints included a mix of economic issues -- being excluded from a $60,000 retirement buyout offered to some production workers, for example -- and non-economic ones, such as a consolidation of worker classifications that could require expanded duties, the sources said.

She said GM has signaled that some of those work-specific issues can be hashed out at the local level, rather than set in stone in the national contract.

“She believes they’ve addressed all the key issues that could hold up” ratification, one of the sources said.

Estrada: GM has signaled some work-specific issues can be hashed out at the local level, rather than set in stone in the national contract.

The union and GM declined to comment.

A split vote between production and skilled-trades workers is rare: It happened at Ford in 1973 and again in 2011 when Chrysler’s skilled-trades workers voted down their tentative deal.

The UAW ratified the Chrysler contract anyway, after determining that the workers objected to the deal’s broader economic aspects, not to the part of the agreement specific to skilled trades.

If the UAW were to determine that the skilled-trades workers’ objections were legitimate, it could jeopardize the entire contract, analysts say.

The union could ask GM to reopen the talks to address some of those specific issues, but the company could refuse, raising the possibility of a strike.

Voting on the UAW’s tentative agreement with Ford Motor Co. started today at some plants. Nearly 53,000 Ford workers will have a chance to vote on the deal through next week.

Raise for Tier 2

The GM agreement would establish an eight-year grow-in period for Tier 2 workers, who were hired in recent years and are paid an hourly wage of about $16 to $19, slightly more than half what their Tier 1 counterparts earn. About 20 percent of GM’s 52,600 hourly UAW workers are in the lower-paid Tier 2 category.

Under the unratified contract, new hires would start at $17 an hour and see wage increases each year through the eighth year of employment, when their wage will reach nearly $30. That would match Tier 1 workers, who also are getting their first wage increases in more than a decade: 3 percent raises in the first and third years of the contract, with lump-sum bonuses in the second and fourth years.

GM also committed to spend about $8 billion across 12 U.S. factories over the life of the contract, the union said. That spending should “create and/or retain” more than 3,300 jobs, the UAW said.

The deal also included an $8,000 signing bonus, to be paid in the second pay period after ratification. Workers also would be eligible for lump-sum performance bonuses of $1,000, in addition to an annual $500 bonus if GM hits vehicle-quality targets.

Nick Bunkley contributed to this report.

You can reach Mike Colias at autonews@crain.com

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