General Motors has outlined details of its 2011 labour agreement with the United Auto Workers (UAW) during a conference call with analysts hosted by chairman and CEO Dan Akerson and senior vice president and CFO Dan Ammann.
The agreement, which has been ratified by the UAW membership – 65% production and 63% skilled trades – covers 48,500 hourly GM employees.
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“The agreement is a win-win for our employees and our company,” said Akerson. “It underscores the alignment between the UAW and the new GM in our efforts to drive long-term success, and gives all of our employees a direct stake in the quality of our products and our performance.”
The agreement is expected to have a limited impact on GM’s fixed cost. Instead, it recognises hourly employees with what the company claims is a more transparent profit sharing plan that aligns with the company’s performance. In addition, a new quality performance-based bonus is being implemented that will give employees an opportunity to benefit from improvements in the initial quality of GM vehicles.
GM added it protected its low, break-even level in the event of a US industry downturn and preserved GM’s fortress balance sheet, with no pension increases and the capping of the hourly defined benefit pension plan population.
“GM and the UAW remain steadfast in our commitment to strengthen the US manufacturing base, create good-paying jobs and build the high-quality, fuel-efficient cars and trucks our customers deserve,” said Akerson.
In addition to the US$5.1bn GM has invested in products and plants, and 13,000 jobs it has created or retained in the US since August 2009, the company plans to make additional manufacturing investments of more than US$2 billion to create or retain more than 6,300 jobs during the four-year agreement period.
