GM kept labor costs in check in a new pact with the UAW

Article by Christian A., on September 20, 2011

General Motors’ new pact with the UAW will be made public on Tuesday yet but it has been discovered that the automaker was able to keep labor costs down. Two sources said that while the union wanted a bonus of $8,000 to $10,000 for each person who agreed to the four-year contract, GM was able to bring it down to $5,000.

The sources also divulged that GM will raise entry-level pay by $2 to $3 an hour. The union said that the contract ties more pay to GM's earnings and results to some wages being variable. An analyst for Barclays Capital, Brian Johnson, has an "overweight" rating on GM stock.

He said that it doesn’t appear as if GM “held the line" on labor costs, according to BusinessWeek. Barclays and the Center for Automotive Research in Ann Arbor, Mich., estimated that GM’s payments to its union workers are 47% higher than the payments of Volkswagen AG and Hyundai Motor Co. GM has posted profits for six straight quarters and in the first half of 2011, it took back the title of world's biggest automaker.

Johnson said that it’s likely that the gap won’t close much under the new deal. On the New York Stock Exchange last Friday, GM fell 9 cents to $22.61. This is 31% lower than the $33 price of its November initial public offering. CEO Dan Akerson has failed to turn around the dropping stock price as analysts lowered expectations for U.S. auto sales with the waning of consumers' confidence.

Topics: gm, uaw

If you liked the article, share on:

Comments

Recommended

Ford Motor Co. now has a new man on the top, and he goes by the name of Jim Hackett. Effective May 22, 2017, Hackett is named the new president...
by - May 24, 2017
Skoda recently launched the new Karoq compact SUV as a replacement model to its now-defunct Yeti small crossover. Slotted below the newly introduced Skoda Kodiaq, the new Karoq features a...
by - May 23, 2017
There are already rumors suggesting that the next generation BMW 5-Series GT is expected to be joining the 6-Series range. The latest reports instead tell us that that 3-Series GT...
by - May 23, 2017
In 2004, the British marque Rolls-Royce officially entered South Korea with the opening of their showroom located in Seoul before opening their second showroom last September in Busan. Now RR...
by - May 23, 2017
In a game-changing move, Ford has revealed that it will soon produce its first ever all-electric CUV that will be built to be electric from the ground up, and it...
by - May 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries