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GM - Auto Workers Saturn contract.

In a development that could influence labor-management relations elsewhere in the automobile manufacturing industry--and possibly in other industries--General Motors Corp. (GM) and the United Auto Workers (UAW) agreed on an innovative contract for the company's new Saturn automobile subsidiary. The possibility that the innovations in the Saturn agreement will be extended to other settlements was downplayed by GM and the UAW, which described the Saturn accord as a "special case" all-out attempt to overcome the cost advantages of Japanese and other foreign small car producers. This position was embodied in a letter from the union to GM stating that the agreement does not set "a precedent at any other facility, including those at General Motors."

The Saturn accord, expected to cover 6,000 workers when the planned Tennessee plant begins production in 1989, does not have a set expiration date. Instead, the parties view it as a "living document," permitting them to negotiate additions, changes, and deletions at any time. If either party is unable to obtain desired modifications in this manner, the party is permitted to initiate "formal" negotiations and to initiate a strike or lockout if a settlement is not attained within 30 days.

The operating and skilled technicians comprising the bargaining unit will be drawn primarily from active and laid-off workers represented by the union at other GM plants. They will not lose any other benefits if they do not apply for the jobs at the Spring Hill facility. To the extent permitted by law, employees will be encourage to join the union. (Tennessee is a "Right to Work State," meaning that employees cannot be required to join a union as a condition of employment.)

Based on their belief that "people are the most valuable asset of the organization," all UAW-GM members initially hired by Saturn will enjoy permanent job security. Thereafter, new employees will gain such protection, depending on seniority, and at least 80 percent of the work force will be covered at all times. Employees will not lose their protected status because of fluctuations in the work force and the unprotected employees will be subject to layoff only because of "catastrophic" conditions. Further, the union will have a say in determining if a condition is indeed catastrophic because it will be "a full partner" in all decisionmaking, meaning that "no decision can be reached without its approval," according to UAW President Owen Bieber.

In line with this principle, the accord establishes a work structure comprising "Work Unit Members" (individual employees), Work Units (integrated groups of about 6 to 15 members), several intermediate joint bodies, and, at the top, a Strategic Advisory Committee responsible for longrange planning and dealing with outside parties such as suppliers, stockholders, and communities.

Despite these mechanisms to obtain mutual agreement to particular policies or actions, either party "may block a potential decision." In recognition of such possible difficulties, the agreement provides for retention of the traditional grievance procedure, which culminates in binding arbitration of unresolved issues.

In another major deviation from usual practice, members' base pay will be established on an annual basis and they will be paid semi-monthly. During the period from the effective date of the agreement to 1 year following the production of the first for-sale vehicle, annual salaries will be calculated at $13.45 an hour for operating technicians and $15.49 for skilled technicians. In addition, during this "bridging" period they will receive quarterly payments reflecting compensation changes of UAW-represented workers at GM plants, such as automatic cost-of-living pay adjustments (COLA), negotiated wage changes, profit sharing, and performance and attendance bonuses.

During the following year, annual salaries will be calculated according to an hourly rate equal to 80 percent of the average at domestic plants of GM, Ford Motor Co., Chrysler Corp., Mazda Motor Corp., and New United Motor Manufacturing, Inc. The resulting salaries, which will be subject to periodic adjustment by the Strategic Advisory Committee, will be supplemented by possible payments under a reward system designed to assure pay equal to comparable employees of GM. Performance above or below the requirements of the reward system will result in greater or lesser pay than comparable GM employees. The reward system will include factors such as performance to individual and group objectives, specific productivity targets, and profits available for distribution to members under a Saturn Sharing Formula.

In another departure from the practice at GM plants, there will be only one job classification for production workers and three to five for skilled workers. GM workers--and those at Ford, Chrysler, and American Motors Corp.--are divided into numerous classifications, which management generally views as detrimental to productivity.

In addition to attempting to unify the manufacturing and office workers at the plant by having all workers on a salary basis and giving them a voice in operations, the parties also eliminated time clocks and separate parking lots and cafeterias for the two types of workers. There also was a provision for introducing rotating, rather than fixed, shifts for all workers in the bargaining unit.

Other terms include--

* Holiday and vacation entitlements matching those at GM, with transferring employees receiving vacations calculated on combined GM-Saturn service.

* A defined contribution-individual account type of retirement plan. GM employees with at least 10 years of service transferring to Saturn will receive combined benefits, with one portion calculated on their years of service under GM's defined benefit plan and the other portion calculated according to their years under the Saturn plan.

* Establishment of individual savings plans under which members can contribute up to 15 percent of base pay. Saturn will match the member's contribution up to 6 percent of base pay at a rate of $1 for every $2 contributed by the member.

* Sickness and accident benefits beginning the first day after the disability occurs. Full base pay will be paid for the first 30 days of the disability, 80 percent for the next 30 days and 60 percent for the balance of the year following the disability.

* Extended disability benefits at a 60-percent rate for a period equal to combined GM and Saturn service for Saturn members with combined length of service of less than 10 years. Those with 10 or more years of combined service will be eligible for a 60-percent benefit until they reach eligibility for unreduced social security benefits.

* Saturn-financed life insurance equal to two times base annual pay, with employees given the option of purchasing additional coverage up to five times base pay, as well as purchasing $10,000 coverage of their spouse and $5,000 coverage of each dependent child.

* Hospital--medical--surgical insurance coverage similar to provisions in the current GM-UAW agreement.

One of the first reactions in the auto industry to the Saturn accord came from Chrysler Chairman Lee A. Iacocca. Speaking on the eve of the bargaining with the UAW, he said Chrysler should get "no less" than the terms of the Saturn agreement. Chrysler's 1983 agreement with the union is scheduled to expire on October 14, 1985. GM and Ford's 1984 agreements are scheduled to expire on September 14, 1987. American Motors' 1985 agreement is scheduled to expire in 1988. (See Monthly Labor Review, September 1985, pp. 51-52.)
COPYRIGHT 1985 U.S. Bureau of Labor Statistics
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Author:Ruben, George
Publication:Monthly Labor Review
Date:Oct 1, 1985
Previous Article:Occupational salary levels for white-collar workers, 1985.
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