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

Mitsubishi finally introduces the new Xpander MPV at the 2017 Indonesia International Auto Show in Jakarta Indonesia. Replacing the previous Expander, the new multipurpose vehicle will be mostly sold at...
by - August 16, 2017
Infiniti revealed its retro Prototype 9 race car before its slated debut at 2017 Pebble Beach Concours d'Elegance next week. In a recent press release, the company not only disclosed...
by - August 16, 2017
In the United States, not many automakers offer crossovers with a diesel engine option, but Chevrolet does, with their 2018 Equinox. Those who opt for this engine will get some...
by - August 16, 2017
Here are some things that potential buyers of the Ford F-150 and Ford Expedition could look forward to for the 2018 model year. The 2018 models of the F-150 pickup...
by - August 15, 2017
We first saw the McLaren 720S earlier this year when it made its debut at the Geneva Motor Show, and we all agree that it is a beautiful car. But...
by - August 15, 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