AP Features, October 15th, 2007
General Motors Corp. discussed financial details of its new four-year agreement with the United Auto Workers union Monday. GM's UAW members ratified the contract last week. Among the highlights:
RETIREE HEALTH CARE: The contract establishes a UAW-run trust for retiree health care that would take over GM's $46.7 billion in retiree health care obligations. The company would contribute $31.9 billion toward the trust, including $16 billion from an existing trust, $2.5 billion in upfront cash and $5.6 billion in additional payments over 13 years and $4.4 billion in a note convertible to 109 million GM shares.
SAVINGS: GM said it would start realizing savings from the retiree health care trust starting in 2010, when it would save $2.8 billion. The company said it would save $3.3 billion in 2011.
TWO-TIER WAGES: The contract allows GM to pay lower wages and benefits to more than 16,000 non-assembly workers doing noncore jobs. Those workers would make $25.65 per hour in wages and benefits, compared to $78.21 per hour for core assembly workers. GM and the UAW plan a buyout program to replace some current noncore workers with lower-paid ones, but details of that program weren't released Monday.
JOBS BANK: The contract makes changes to the so-called Jobs Bank, which pays employees even when they're not working. Under the contract, a laid-off employee who is offered a job within 50 miles of his or her old plant must take that job or be placed on leave without pay and benefits. Employees can refuse up to four job offers at plants further than 50 miles away before being placed on leave. GM wouldn't say how many workers are in the Jobs Bank.
