class=”times”> According to a statement from GM, the deal involves a promise to set up an independent retiree health care trust, as well as other changes regarding new hire wages.
class=”times”> The creation of an independent trust to take over some $50 billion owed to GM-UAW retirees for health care would help GM, which saw its credit plummet to junk ratings, in part because of concerns about its behemoth debt, the Wall Street Journal reported. The Voluntary Employees Beneficiary Association (VEBA) would be worth more than $35 billion, at 70 cents on the dollar.
class=”times”> “This agreement helps us close the fundamental competitive gaps that exist in our business,” Rick Wagoner, GM chairman and chief executive, said in the statement. “The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments.”
class=”times”> The deal comes after a two-day strike by UAW against GM. Terms of the contract were not disclosed and it still awaits approval by UAW members and the Securities and Exchange Commission.
class=”times”> Another part of the deal between UAW and GM is a change in the Job Bank system, a job-security provision that allowed unemployed UAW members to get full pay for years without working. Sources told the Journal the system will change so it will be much less likely there will be many people in the Jobs Bank for any length of time.
class=”times”> Some of the other likely parts of the deal that were reported by the Wall Street Journal were:
- A drop in the rates paid to new UAW members brought into GM, but that new compensation structure will likely not apply to skilled workers
- 4,000 to 5,000 temporary workers would be hired in as full-time workers and paid at the full, tier-one wage-and-compensation rate that is estimated at $70-$75 an hour once wages, benefits and pensions are included.
- Substantial early-retirement buyouts to make room for new hires.
- GM would be able to negotiate a diversion on cost-of-living adjustments and increased cost-sharing on health care for active workers.
- A likely signing bonus for workers, plus lump-sum bonuses of 3%, 4% and 3% of annual pay over the last three years of the deal.