GM to pay UAW workers around $12 million in bonuses

Article by Christian A., on December 9, 2011

About 10 weeks after General Motors Co. ratified a new labor contract with the UAW, the automaker announced that the union hourly employees have hit vehicle-quality targets and are eligible to receive around $12 million in bonuses. GM spokeswoman Kim Carpenter said that the Dec. 16 paychecks of these eligible employees will carry the $250 bonus.

She said that a "vast majority" of GM’s 48,500 UAW-represented workers are eligible but she declined to provide specific figures.
Ford spokeswoman Marcey Evans said that the bonuses will be received by its 41,000 UAW workers this Friday. She said that these bonuses are being given because its U.S. plants achieved competitive targets. GM Chief Executive Officer Dan Akerson said that the carmaker’s new four-year labor contract sustains the company’s competitiveness by just marginally raising the automaker’s $5 billion annual labor tab.

Senior workers won't be getting a base wage increase and the union has agreed that some pay will be based on GM's profitability. Carpenter added that annual quality bonuses rely on GM's target for incidents per 1,000 vehicles that were in service for two months. She announced that the company is 98 percent of its target, which means that the payout is $250 per eligible UAW employee.

In late September, the workforce at GM ratified their new four-year contract, as agreed upon between the carmaker and the UAW union. The four-year contract represents the first since GM and Chrysler Group LLC were bailed out by the US government in 2009. The UAW union opted to complete talks with GM first, before reaching an agreement with Chrysler and talking to Ford.

The new contract entails recalling about 570 GM workers currently on layoff as well as moving production of a new vehicle to the GM’s now-idled assembly site in Spring Hill, Tennessee. It also entails paying a one-time contract-signing bonus of around $5,000 for each worker. GM offered to give bonuses and share profits instead of increasing wage in the traditional matter as part of an effort to avoid fixed costs that contributed to the near collapse of auto industry’s two years ago.

The United Automobile Workers (UAW) – formally known as the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America –is an American labor union that represents workers in the United States, including Puerto Rico, and Canada.

UAW was founded as part of the Congress of Industrial Organizations (CIO) in May 1935. UAW experienced rapid growth from 1936 to the 1950s. It was successful in organizing a sit-down strike in a General Motors Corp. sites in Atlanta, Georgia in 1936 as well as in the Flint – resulting to the UAW union being recognized by General Motors. A month later, Chrysler recognized UAW. In 1941, UAW forced Ford to ink a collective bargaining agreement.

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