General Motors has reached an unusual healthcare and buyout deal with workers at an Ohio SUV plant, closure of which was last month brought forward from 2010 to 23 December.
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Unlike GM’s other US assembly plants where workers are represented by the United Auto Workers (UAW) union, the Moraine plant – which builds the Chevrolet Trailblazer and GMC Envoy – was once a Frigidaire (GM’s former domestic appliances division) plant with workers represented by the IUE-CWA union before it was acquired by the automaker, Reuters reported.
GM will pay $1.6bn into a healthcare trust for retirees and offer buyouts of up to $140,000 to union-represented factory workers in exchange for an agreement to close the plant. Creation of that voluntary employee beneficiary association – or VEBA – was the most striking component of the tentative agreement between GM and the IUE-CWA union, the news agency said.
The union said the agreement to pay the $1.6bn into a fund for IUE-CWA retirees over the next few years was patterned after the automaker’s agreement with the UAW last year.
GM reportedly confirmed it had reached a tentative agreement with the IUE-CWA union over terms for closing Moraine but a spokesman declined to comment on the offer details until after a ratification vote by the affected union members.
The deal would see GM offer buyouts and early retirement incentives on similar terms to those offered in plants represented by the UAW. The automaker would also pay out $3,850 to each affected worker, Reuters said.
GM last week said it would also close its Janesville, Wisconsin, sport utility vehicle factory on 23 December, about two years earlier than planned.
The factory makes the large Chevrolet Tahoe and Chevrolet Suburban SUVs and the GMC Yukon, and a GM spokesman was quoted as saying sales were falling so the automaker decided to shutter the factory early. It employs 1,200. GM had previously hinted Janesville could shut earlier than scheduled in 2010 if market conditions dictated.
Last June, CEO Rick Wagoner said at the automaker’s annual general meeting that Janesville would cease production of medium-duty trucks by the end of 2009, and of the Tahoe, Suburban and Yukon in 2010 – or sooner.
In the same announcment, GM said Oshawa Truck Assembly in Canada, which builds the Chevy Silverado and GMC Sierra trucks, would likely cease production in 2009, while Moraine, Ohio, which builds the smaller Chevy TrailBlazer, GMC Envoy and Saab 9-7x SUVs would end production at the end of the 2010 model run, or sooner, if market demand dictates.
GM last month moved up Moraine’s closure to 23 December for the same reasons as Janesville – declining SUV sales and too much capacity.
GM reached a deal with the UAW last year under which it will shift its $47-billion obligation to pay for health care for some 270,000 union-represented retirees to a trust fund affiliated with the union, Reuters noted.
