General Motors (GM) has reached agreement with the United Auto Workers union on a new four-year labour contract covering the Detroit carmaker's 48,500 U.S. workers.
Both sides said that they would not disclose details of the deal, reached late on Friday night, while the UAW seeks ratification from its members. A ratification vote is expected within the next 10 days.
Still, the union said that it had achieved "improved profit sharing with far greater transparency than in the past," as well as "significant improvements" in health care benefits.
The new contract is the first negotiated since GM and Chrysler's 2009 restructuring as part of a taxpayer-funded bailout. Contract talks with Chrysler and with Ford Motor (F) are continuing.The talks, covering a total of about 113,000 workers, are being closely watched as an indication of whether the carmakers can keep their costs in check as they recover from the 2008-09 industry crisis. > > Bull or Bear? Vote in Our Poll The UAW's top priority has been to secure a bigger and more secure stake for its members in the three carmakers' future profits. Workers at Ford each received a profit-sharing bonus of $5,000 this year. GM paid out $4,300 per worker and Chrysler $750. The UAW has also sought a pay increase for so-called "second tier" workers, whom the carmakers are now allowed to hire at about half the traditional hourly wage. This group also receives less generous benefits. Announcing the latest deal, Cathy Clegg, GM's vice president for labor relations, said that "we used a creative problem solving approach to reach an agreement that addresses the needs of employees and positions our business for long-term success." Arthur Schwartz, a consultant and former GM labor negotiator, told Goldman Sachs clients earlier this week that he expected the main feature of the new contracts to be generous signing bonuses of between $5,000-$7,500 at GM and Chrysler, and as much as $2,000 above that amount at Ford. This year's contract talks have taken place in a calmer atmosphere than in the past, partly because the union accepted a no-strike provision as part of the 2009 GM and Chrysler bailouts. It has made no such deal with Ford, but a strike there is also considered unlikely.