GM Offers $5,000 ‘Signing Bonus’ as Part of Deal With Union That Owns GM

Posted on | September 19, 2011 | 21 Comments

The details of the $50 billion government bailout are sort of foggy in my memory, but if I recall correctly, GM’s bondholders — the people who had loaned money to the bankrupt automaker — got shafted so that Obama could hand a fat chunk of the company over to the United Auto Workers. OK, so guess what happens when the UAW’s contract comes up for negotiation?

The agreement, reached late Friday, includes a $5,000 signing bonus and the possibility of sweeter profit-sharing checks for GM’s 48,500 factory workers . . .
If approved, the GM contract will serve as a template for the UAW’s negotiations with the other two U.S. automakers, is the first since GM and Chrysler Group LLC received government bailouts to make it through bankruptcy protection in 2009.
GM pays around $56 per hour including wages and benefits . . .

Quick calculation: If all 48,500 workers each get $5,000 on acceptance of the contract, that’s $242.5 million up front — just cut ’em a check for nothing other than agreeing to the contract — which ought to do wonders for GM’s future financial viability, don’t you think?

And $56 an hour? At 40 hours a week for 52 weeks a year, that’s an annual compensation of $116,480.

Oh, the poor oppressed industrial proletariat!

Category: Economics

Comments

21 Responses to “GM Offers $5,000 ‘Signing Bonus’ as Part of Deal With Union That Owns GM”

Joe
September 20th, 2011 @ 12:20 am

Buy a Ford. I also hate to say it, but you would be better off buying a Toyota, Honda or Subaru. http://blogs.automotive.com/uaw-and-why-honda-and-toyota-workers-are-not-interested-1478.html

Seriously the UAW is becoming the enemy.
PhilipJames
September 20th, 2011 @ 12:30 am

Stacy…. now what chance does Ford, which took no money, have as it negotiates a union contract? You know how the union does that one… they say, hey… look at what GM gave their workers… we want the same.

This is the crap that Obama has started… GM is bailed out so the union keeps all their jobs, keeps their pricey pensions and has the Federal Government basically guaranteeing it forever (or as long as it still owns 26% of the shares) and GM is competing against a private capital company called FORD.

Ford is screwed. How do they compete against the Communist State owned GM when it comes to negotiating wages?

Screw Obama. Thats all I have to say.
newrouter
September 20th, 2011 @ 12:36 am

”

BY GREG GARDNERPATRICIA BECK/Detroit Free Press

Related Links
UAW to release details of GM deal Tuesday; analyst calls pact partial victory for both sides
Source: GM’s costs rise little in new UAW pact

UAW President Bob King will sell his tentative four-year agreement
with General Motors to local union leaders beginning Tuesday, then
decide whether he will go next to Chrysler or Ford to try to close a
deal, according to sources familiar with the union’s plans.
Shop
chairmen and presidents from more than 30 plants and dozens of parts
warehouses will meet at 9 a.m. Tuesday at the UAW-GM Center for Human
Resources in Detroit. That’s when King will reveal the details of the
deal, which haven’t been formally announced. Then, those local leaders
will urge their members to ratify the contract in voting over the next
10 days.”
JeffS
September 20th, 2011 @ 12:39 am

I won’t be buying any Government Motors vehicles, that’s for sure.
dad29
September 20th, 2011 @ 12:45 am

Gummint Motors’ problem is that the workforce is skewed “old”…heavily. Seniority means higher wages, higher health-care costs, and larger pension contributions.

And yes, FoMoCo will have to eat the same sandwich, more or less. That’s the objective, of course.
Guest
September 20th, 2011 @ 12:48 am

This post is a pretty good reason why non-businessmen should never comment on business matters – a lack of knowledge about the subject matter.

The concept of signing bonuses in collective bargaining is a pretty commonly used technique. It serves as a means of reconciling management positions and union demands in the area of wages. The thing about characterizing payments as “signing bonuses” is that they do not get added into the salary base for purposes of applying cost of living increases (which then get compounded throughout the term of the collective agreement).

As well, they do not harm other companies in industries such as the automotive industry which rely heavily on “pattern bargaining” (Ford/Chrysler workers want what GM gave). The other companies can still be subject to bonus demands, but they also take the benefit outlined above.

As well, while one might be fooled by the term “signing bonus”, the fact is that signing bonuses are not always paid on signing. Frequently they are paid in installments, according to a collectively bargained process (note: this also applies to signing bonuses in sports, BTW).

As an aside, signing bonuses have been specifically used in the automotive industry for years, both before and after GM bankruptcy, and by virtually every automotive company.

I am no fan of unions, I assure you (I think they are an anachronism at best and have outlived their usefulness in most parts of our current heavily regulated modern world), but this type of sniping is just silly.
Joe
September 20th, 2011 @ 1:05 am

How do you think Obama gets re-elected? The Chicago way, he buys it.
Anonymous
September 20th, 2011 @ 1:11 am

I don’t have a car. I drive a russian sidecar motorcycle. My wife just got a new car. 2011 Subaru Forester. She replaced her 2008 Subaru WRX to be able to use regular gas as the WRX required premium. No Government Motors cars for us.
Charles G Hill
September 20th, 2011 @ 1:12 am

Of course, that $56/hr is the Tier 1 wage plus bennies; new hires are generally Tier 2, which runs maybe half as much.
newrouter
September 20th, 2011 @ 1:25 am

yea because doing a deal with a gov’t entity 1st and 2nd ain’t going to hurt the private run one at 3. dream on.
Anonymous
September 20th, 2011 @ 1:58 am

How much do the taxpayers loose if GM goes bankrupt in a year or two?
It’s exactly this kind of crap got them in financial trouble.

I suspect that the argument goes that the union gave some things back to GM as part of the deal and now the that the company is doing OK it’s time to share the prosperity.
Anonymous
September 20th, 2011 @ 2:06 am

So what happens to GM if another administration (note the misplaced faith in Republicans inherent in this question) aggressively goes after the rest of the money they owe? Or even better and perhaps more likely what happens if the Volt and other “green energy” subsidies end?
Adjoran
September 20th, 2011 @ 4:13 am

Who do you think builds Fords, the Right to Work Committee?

They wisely declined the buyout, I mean bailout, so they may actually get the privilege of running their own company without the benefit of the expertise of those community organizers, but the UAW still rules their domestic production.
Adjoran
September 20th, 2011 @ 4:16 am

Ford knows the UAW is itching to strike them and give GM a competitive advantage since the union owns a piece.

As if GM weren’t already dominating with the super-popular Chevy Volt . . .
Wyoming_Navy_Admiral
September 20th, 2011 @ 4:53 am

Yeah, it’s silly. $242.5 million worth of silly.
Bob Belvedere
September 20th, 2011 @ 12:30 pm

‘Becoming”?????
Bob Belvedere
September 20th, 2011 @ 12:32 pm

Adj: Is there a way that Ford could decertify the union or reorganize it’s corporate structure to enable them to make cars with non-union workers?
Bob Belvedere
September 20th, 2011 @ 12:33 pm

Government-sanctioned extortion [ie: Fascism] is what this whole UAW negotiating procedure has always been.
chuck coffer
September 20th, 2011 @ 4:50 pm

“The concept of signing bonuses in collective bargaining is a pretty commonly used technique.”

As is the use of baseball bats.
Poopoo
September 22nd, 2011 @ 4:44 am

If it was cheap enough you would buy one.
Misterdisneynut
September 22nd, 2011 @ 2:35 pm

Wow you are one stupid fucking asshole!!!!!!!!!!!!!!!!!!!!!!!!!!!!!