DETROIT -- The UAW’s tentative labor contract with General Motors includes a commitment to spend $8.3 billion over four years on upgrades to 12 U.S. plants, along with the union’s first significant wage increases in a decade and an $8,000 signing bonus to persuade workers to support the package.
The union said the $8.3 billion in investment would “create and/or retain” more than 3,300 jobs.
About $6.4 billion of the planned outlays have previously been announced by GM. The investment “is designed to ensure optimal utilization of the company’s U.S. facilities and provide job growth,” the union said in its contract summary.
The details regarding future product investments were thin relative to past contracts, and mostly a rundown of spending earmarked for new-vehicle programs that GM has already disclosed.
Among the biggest outlays are $1.2 billion for a new paint shop at GM’s full-size pickup plant in Fort Wayne, Ind., and $1.4 billion for an expansion of the Arlington, Texas, plant where the company produces large SUVs.
The company also will offer buyouts worth up to $60,000 to up to 4,000 eligible UAW members who agree to retire between Feb. 1 and May 1, the union said, in a move aimed at offsetting the added fixed labor costs from the wage increases.
UAW President Dennis Williams said the retirement incentive would compensate workers who had to take concessions in 2003, 2007 and 2009.
Profit sharing formulas under the proposal could pay off for UAW members at GM. The company's UAW workers will get $1,000 for every $1 billion in North American profit. GM North America has posted $8.3 billion in profit in the first nine months of 2015.
More than 100 local union leaders gathered here Wednesday to review terms of the tentative agreement, and agreed to submit it for a ratification vote by GM’s 52,600 union-represented workers.
Workers at local unions could begin voting as early as Friday, with a final result possible by late next week.
“We secured better pay, a clear path to traditional wages for all current members and commitments to keeping jobs and product here,” Williams said in a statement.
After the union announced the tentative pact late Sunday, GM in a statement called the deal “good for employees and good for the business."
The tentative agreement with GM closely follows the pattern set by the union’s new four-year contract with Fiat Chrysler Automobiles, which was ratified last week.
It provides a path for entry-level, so-called Tier 2 workers at GM to get to the top pay scale earned by Tier 1s through an eight-year ladder of pre-determined annual raises, until they reach full wages of $30 an hour. The top wage for Tier 2s under the 2011 contract was about $19 an hour.
About 20 percent of GM’s workers today, or roughly 10,500 employees, fall under the Tier 2 wage scale.
The GM contract would extend to Tier 2 workers the same health care benefits that Tier 1 employees receive, including full dental and vision coverage and no deductibles or co-insurance. It also extends health coverage to temporary workers.
Legacy Tier 1 workers -- about 80 percent of GM’s union workforce -- will receive a 4 percent wage increase in the first and third year of the contract, along with a 4 percent lump sum in the second and fourth year.
The $8,000 signing bonus will go to both Tier 1 workers and Tier 2 employees, the unions said. Fiat Chrysler Automobile's Tier 1 workers received a $4,000 ratification bonus, while second-tier workers got $3,000.
The ratification bonus also is a big jump from the $5,000 that GM workers collected for signing their last contract, in 2011, potentially smoothing the path to ratification by UAW workers as early as next week.
Under the pact, workers also will get a $500 annual bonus when the company hits product-quality targets. Hourly retirees will receive a $500 gift card under the proposed pact.
