Tuesday, October 16, 2007

General Motors tells Wall Street: UAW deal will save billions

WSWS : News & Analysis : North America

General Motors tells Wall Street: UAW deal will save billions
By Jerry White16 October 2007

In a conference call with Wall Street investors Monday morning, top General Motors executives provided details of the sweeping concessions agreed to by the United Auto Workers union in the new, four-year labor agreement reached last month.

For more than two weeks, GM officials had withheld public comment on the deal, while the UAW leadership campaigned to get it ratified on the basis of misinformation and lies. The agreement was ratified last week with a third of the members who cast ballots voting to reject.
General Motors CEO Rick Wagoner told investors that the agreement “introduces wage and benefit structures” that would help close its cost gap with the non-union factories operated by Toyota and other Asian and European carmakers in southern US states.

GM said US hourly labor costs would decline from $12.6 billion in 2006 to $10.1 billion this year, a reduction of 45 percent from what the company spent in 2003, when it last negotiated a contract with the UAW. Labor costs would continue to decline “significantly” from 2008 to 2011, GM officials said.

GM executives also told investors that the investments in US plants pledged by the company—the supposedly iron-clad job security provisions hailed by the UAW—were entirely contingent on market conditions.

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