DETROIT -- Nearly 2,100 hourly workers at General Motors Co.’s Nexteer Automotive steering plant in Saginaw, Mich., will get a second chance tomorrow to approve a concessionary contract that would spare the plant from possibly closing.
GM has sweetened the five-year proposal by offering health coverage for all workers and their families -- a major sticking point in a vote that failed June 17 by a 3-1 majority. The previous proposal would not have covered the families of new hires.
UAW Local 699 President Troy Newberry said the new proposal was put forward after a petition drive by workers at the plant. The Saginaw plant, which makes steering systems and half-shafts, is profitable.
Newberry said voting would run from 5 a.m. to 9 p.m.
GM has two prospective buyers interested in Nexteer, but a more competitive labor deal is needed to keep them from dropping their bids, according to an internal GM letter sent to Nexteer CEO Robert Remenar and obtained by Automotive News.
“In the event that these bids are withdrawn, GM will have no alternative but to proceed with a plan to wind down Nexteer's Saginaw operations,” said the letter, dated June 22, from Scott Mackie, GM's executive director of new business development.
GM has been trying to sell Nexteer since the automaker took the business back from Delphi Corp., along with four unrelated Delphi parts plants in the United States, so that Delphi could emerge from Chapter 11 bankruptcy last fall.
The Nexteer unit, which has other plants worldwide, posted global revenues in 2009 of about $1.6 billion.
Automotive News reported last year that a Chinese company was interested in Nexteer. In the letter this month, GM did not identify the two prospective buyers.
Workers at the plant this month overwhelmingly rejected proposed midterm changes in an existing contract that would have frozen wages for three years. The changes also would have dropped the new-hire wage from $14 an hour with full medical insurance in the current contract to $12 an hour with medical insurance that would cover a worker but not that worker's family.
A $12-an-hour wage, without overtime, generates annual income of $24,960. The federal poverty level for a family of four is $22,050.
The current contract at the plant runs through September 2011. The proposed new five-year contract does not have a successor clause. Such a clause would require a buyer to honor an existing labor agreement. As the proposed new contract stands, therefore, a buyer would not be required to honor the existing contract.