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GM-UAW settlement.

GM-UAW settlement

General Motors Corp. (GM) settled with the United Auto Workers (UAW) on terms similar to those the union negotiated with Ford Motor Co., despite GM's initial contention that it required special provisions to overcome a cost advantage held by Ford. The advantage, GM said, results from the fact that Ford buys a higher percentage of its automotive parts from subcontractors than GM does, giving Ford an edge because purchased parts are generally less costly than parts manufactured by Ford or GM. A GM proposal to counter the cost disparity by establishing production bonuses was rejected by the UAW. The bonuses would have varied from plant to plant, based on quantity and quality of output, with employees in parts plants being eligible for smaller payments than those in assembly plants.

The UAW broke off concurrent negotiations with the companies, and focused on Ford, settling in September (see Monthly Labor Review, November 1987, pp. 31-33). Subsequently, GM Chairman Roger Smith opened the door to a settlement by indicating that he believed that the new job security program at Ford contained enough flexibility to permit temporary layoffs when sales are slow. The reopened negotiations between GM and UAW resulted in a settlement for the 335,000 workers without the threat of a work stoppage.

The new job security program at GM, Secure Employment Numbers, differs only in name from the Guaranteed Employment Numbers program at Ford. In operation, the programs are essentially identical, except that GM's financial commitment is $1.3 billion, compared with $500 million at Ford, becuase the GM program covers more workers.

Similarly, both settlements provided for the same increase in payments to the regular Supplemental Unemployment Benefits fund--to a range of 24 to 34 cents per straight time hour worked (varying according to the fund level) from a 21- to 33-cent range--but GM's contingent liability to the Advance Credit Account was increased by $250 million, compared with $75 million at Ford. This account is drawn on if the regular funds becomes depleted.

Workers' security was also enhanced by a new GM commitment not to close any plants during the 3-year agreement term, except for closing that had been announced prior to the start of negotiations in July. These closings, scheduled to be completed by 1991, involve 16 plants and 37,000 employees. (Ford also agreed to a "no-closing" provision in 1987 and, unlike GM, had also agreed to a closing ban in the 1984 settlement. To some extent, Ford's earlier acceptance of a closing ban resulted from the fact that it had moved earlier than GM to slim down its operations in the face of the intense international competition that has developed in the industry in the 1980's).

From GM's view, the major advantage of the new job security program is a UAW commitment to joint efforts to improve production output and quality, marroring the initiative at Ford. The program, to be directed by a national committee and local committees, will examine a variety of methods for improving operations, such as adopting work-team concepts, revising job duties, and cutting absenteeism.

In the economic area, the pfofit-sharing formula at GM was revised to match the improved formula at Ford. Under the 1984 agreements, Ford's formula was more liberal than GM's, contributing to average payouts per employee that totaled $5,300 at Ford and $900 at GM over the 1984-86 period.
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Title Annotation:General Motors Corp. and United Auto Workers
Author:Ruben, George
Publication:Monthly Labor Review
Date:Dec 1, 1987
Words:562
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