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.

If you liked the article, share on:

Topics: gm, uaw

Comments

Recommended

November 17 is considered a very special day for Tesla, as this is the day that they revealed the highly anticipated Tesla Semi. But Elon Musk did not think the...
by - November 17, 2017
More details have emerged about the new sixth generation of the BMW M3 just as the German premium practically announced the end of the current-gen 3 Series with the unveiling...
by - November 17, 2017
All is set for Volkswagen’s plans to enter the electric vehicle game, as prompted by the so-called Dieselgate scandal. In fact, the German carmaker has already made a commitment to...
by - November 17, 2017
As BMW has already revealed, the next generation of the BMW M5 (F90) is a four-wheel drive high-performance sedan with overwhelming power output and torque at its disposal. However, it...
by - November 17, 2017
McLaren unveiled a one-off Gold - on - Black 720S at the 2017 Dubai Motor Show which will be on display throughout the entire stretch of this week’s event. The...
by - November 16, 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