UAW and GM 2015

Nikole Cunningham
CollectiveBargaining–IndependentStudyReport
UnitedAutoWorkersand General Motors2015
Labor Agreements between General Motors and the United Auto Workers –
A Review of Negotiations Influencing the 2015 Contract Agreements
Overview
Contract negotiations between General Motors and the United Auto Workers union began
with a handshake on July, 13 2015. Reflecting on the four years that have passed since the
contracts were last updated, General Motors has climbed its way out of a recession with the help
of a government bailout and is prospering in the year 2015. Sales in the United States alone for
GM were fast approaching 17 million vehicles and profits couldn’t have been more outstanding
(UAW, 2015).
In true UAW fashion, union members’ representatives were seeking increased job
security, wage increases, and accomplishing less of a pay gap between more experienced
workers and entry-level workers. The representatives of GM set their sights on reduction of
health care costs. Ultimately, the goal of both GM and the UAW was to continue down a
successful path together.
Both General Motors and United Auto Workers were very positive going into
negotiations. Prior to the sit-down, both sides told news reporters of their expectations. The
president of the UAW, Dennis Williams said, “Our goal is for GM to prosper, for shareholders
and consumers to win and for all UAW members to share in the prosperity of their achievements.
We can all win (UAW, 2015).” Mary Barra, GM’s chief executive, gave the following statement:
“We are truly going to listen to each other and understand the issues we need to work through

Nikole Cunningham
(Vlasic, 2015).” When reviewing the past two contract negotiations of 2007 and 2011, the same
confidence level was not so evident.
2007 Negotiations
General Motors
Quite a lot has happened between General Motors and United Auto Workers in the past
eight years since the contract negotiations of 2007. At that time, General Motors’ bargaining
subjects focused on the goal of becoming the leading automaker in the industry and eliminating
debts that had been accrued over time. GM entered negotiations in hopes of lowering its labor
cost in the U.S. to be more comparable to its competitors, Toyota Motor Corporations. In
addition to lowering labor costs, GM owed more than $50 billion to the UAW for their retiree
health care and was determined to remove the responsibility of that debt from the company.
It was very difficult for General Motors to keep up with its competitor Toyota in sales.
GM had a hard time converting from its reign of trucks to more fuel-efficient vehicles. Around
2005, the housing market started to deteriorate and gas prices started flaring up. GM did not have
the funds to expand their product line to be more fuel-efficient. The car manufacturer put so
much money into its retirement fund for union workers and allowed for 95% pay during idle
times at factories, coming up with enough money to make any major changes was impossible.
General Motors strongly believed that if they could eliminate some of their expenses that
they contributed to the union, they would be able to recover from their shortcomings and focus
more on keeping up with competition. Monetary issues that GM had with the UAW were not

Nikole Cunningham
only in retirement health care, but also starting wages for union employees, guaranteed positions
in case of lay-off, and payouts if GM needed to downsize in unprofitable areas (Welch, 2009).
United Auto Workers
For the UAW, job security and a new trust fund for union members’ healthcare were top-
of-the-list bargaining subjects. GM’s overseas operations had been doing well for the company,
but the success overseas created more risk for jobs in the U.S. GM had resorted to paying-out
union members in order to downsize unprofitable locations.
Up until negotiations began, the union members had confidence that their benefits would
include, “a solid pension and lifetime health care (Lyden, 2007).” Unfortunately, GM had
expressed their disinterest in continuing their contributions to the retirement health care plan due
to the desire to invest the company’s money in more defensive resources against competitors.
The United Auto Workers’ bargaining committee was confident that the idea of a trust fund ran
by the union would be beneficial and allow for the highest amount of union control.
Sceptics in the union worried that the trust fund would “dry up” due to the ever-changing
stock market, and retirees would have no choice but to pick up the slack out-of-pocket. With the
union taking on the entirety of the trust fund, all responsibility fell on their shoulders. Any and
all shortcomings would no longer be monitored and reimbursed by General Motors.
Job security was a huge bargaining subject because it affected both GM and union
workers in different ways. General Motors desired to expand production overseas to areas with
cheaper labor and materials. In order to remain competitive, GM believed that the expense gap
between itself and its main competitor, Toyota, needed to decrease considerably. The smartest

Nikole Cunningham
move for GM at the time would be to close down production plants that were not earning a
profit, and use that money to expand globally.
The United Auto Workers union realized that the jobs of its members were at risk. Short
from shipping American workers overseas, there would be no way that union members would be
able to keep their jobs. Union members at this time had a great deal of benefits from GM and
they understood that the amount of money that GM would save on production overseas, they
would also save from the lack of health care, retirement benefits, and pay for idle times (which
seemed to be increasing).
The UAW knew that General Motors desired that the increasing debt of the retirement
health care program be relieved from their care. In order to gain more security for American
jobs, the UAW was willing to take on the health care program in exchange for new product
designs and materials to strictly be manufactured in the United States. General Motors was not in
agreement with the UAW on this subject, and because of the inability to come to an agreement,
the UAW union members of GM went on strike.
The Strike
The strike of United Auto Workers members involved the picketing of around 73,000
workers nationally (Maynard, 2007). The union’s president, Ron Gettelfinger, justified the strike
by stating, “…there comes a point in time where you have to draw a line in the sand.” This
comment came from GM’s unwillingness to break from the idea of a cost structure that is more
compatible, and a work force that is flexible enough, to compete with reigning automakers
overseas.

Nikole Cunningham
General Motors had already taken steps towards global production and was selling more
vehicles from locations such as Canada, Mexico and China than from its U.S. locations. In fact,
prior to negotiations, GM had forced over a dozen of its factories in America to close and cut
thousands of jobs by offering money for workers to leave or retire.
An expert in manufacturing, James P. Womack, claimed the strike to be, ‘…really a
defining moment,” because GM’s maneuvers in the past were always based around playing-it-
safe and never taking advantage of defining moments. Womack believed that this time, GM had
decided to make the big move towards a new era which focused more on adapting to the
changing auto market.
Morgan Stanley analyst, Jonathan Steinmetz, believed that General Motors could endure,
“several weeks” of a strike, but not more than that. Stanley estimated that within a month’s time,
investors of GM would grow weary of the stand-off and start to consider pulling back their
resources from the company. This information, on top of other factors, puts the strike almost
entirely in the UAW’s favor.
Mark Oline of Fitch Ratings, a nationally recognized statistical rating organization,
confirmed that the United Auto Workers has the ability to strike far beyond the “several weeks”
that General Motors can withstand. According to Oline, the union payed each worker, “$200 a
week in strike pay if they take shifts on the picket line,” and the UAW had, “…nearly $900
million in its strike fund.” But even with the odds in their favor, union president, Gettelfinger,
showed his discomfort with the strike by saying, ‘Nobody wins in a strike.’
The newsworthy two-day strike (September 24th – 26th, 2007) broke a 31-year streak of
strike-free negotiations, but ultimately pushed for an agreement that removed the Voluntary

Nikole Cunningham
Employees Benefits Association, or VEBA, health care plan from GM and into a trust fund,
relocating the weight of the approximately “$51 billion unfunded retiree health care obligation,”
to a trust ran by the UAW. Also achieved by GM, was reduction in pay and benefits for new
workers. General Motors was optimistic that the money saved through this agreement would help
them be more competitive with their biggest competition, Toyota.
The Aftermath of 2007
Following 2007 negotiations, 2008 was not a good year for GM. Drops in America’s
housing market were preventing people from purchasing new vehicles and Toyota officially took
over as the world’s biggest carmaker. According to numbers on an article from online news site
Treehugger.com, “…the final total (was) 8.972 million vehicles for Toyota and 8.356 million for
GM (Richard, 2009).” For a company that once sold over 9 million vehicles a year, this was a
large drop and a huge disappointment. General Motors’ liabilities far exceeded its assets, and
selling the company’s stocks just wasn’t enough to cover the gap. The only other option was to
plead to the United States government for a bailout (The Bankruptcy of General Motors: A giant
falls, 2009).
On June 1, 2009, General Motors filed for chapter 11 bankruptcy. The US government
handed over a whopping $50 billion to help the once-profitable car manufacturer recover. In
return, the government received 60.8% of GM’s stock. The Canadian government, who also
chipped in $9.5 billion, received 11.7%. By July 10, 2009, GM was no longer in bankruptcy and
in November of 2010, it becomes a public company once more (Woodyard, 2013).

Nikole Cunningham
2011 Negotiations
Contract negotiations in 2011 started out on a positive note. With General Motors back
on its feet from the ground-shaking bankruptcy, the UAW and GM seemed to be on good terms.
Jim Graham, the president of Lordstown’s UAW, made the statement,
“We learned a lot three years ago. We came to the realization that management is
not the enemy; the enemy is the competition. Management and the UAW have the same
goals now. We still have our issues with the company, but we resolve them like a
business (Shapiro, 2011).”
Not all was well between the United Auto Workers and GM, however. Many union
members sacrificed during the bankruptcy with intense pay cuts and having to relocate to plants
far away from home in order to maintain normal wages. Union member Todd Siglow, like many
others, had to decide between working 400 miles away from his family and taking a pay cut of
50-percent. Siglow stated, “They are so proud of their image: the new GM, the new UAW. They
preach (about) brotherhood, solidarity, whatever…My family is ripped apart. Nobody is helping
me… (Shapiro, 2011).”
On the surface, the negotiation process seemed to be mainly about maintaining the peace.
Beneath, many union members are wondering when and how they will be reimbursed. When
considering the two-tier wages agreed upon by the UAW in 2007, union members fear that the
first-tier wage for entry positions would become the new norm. Many of the union workers were
forced to accept the demotion to the lower rate or move to another plant during the bankruptcy.
With the UAW seeming to put the most importance on preserving a positive relationship with

Nikole Cunningham
GM, union members were afraid that the first-tier pay would continue to decrease as the UAW’s
new bargaining option (Shapiro, 2011).
Regardless of conflicting views, a tentative agreement was reached on Friday, September
16 of 2011. Positives for the UAW included in the agreement were rehiring a large amount of
workers who lost their jobs during downsizing, guarantees on investments and products for U.S.
plants, improved profit sharing payments, increased wages for starting workers, and a signing
bonus for the approximately 48,500 UAW workers (Isidore, 2011). For General Motors, the
2011 contract eliminated the “Job Bank” that had guaranteed laid-off workers nearly full pay,
eliminating pension increases, and getting the UAW to agree to an incentive program that assists
in getting underutilized workers to retire (Visnic, 2011).
GM CEO Dan Akerson had described the agreement as a, “win-win” for both GM and
the UAW. General Motors was able to create savings by offering buyouts of $75,000 for skilled
trades who are willing to retire before April of 2012. This saved the company an estimated $30
million. Profit sharing was also capped at $12,000 per year for employees instead of the previous
non-capped program. In an effort to eliminate more liabilities, GM decided to close the
Shreveport, Louisiana location, who did not have enough business to sustain (Dziczek, 2011).
The United Auto Workers union was successful in resurrecting jobs to around 6,400
previously terminated employees. The settled agreement also guaranteed 1,300 new apprentice
positions and increased cross-training for employees. As far as investments in the U.S. go, GM
had confirmed $7.1B in investments including new products and technology (Dziczek, 2011).
Unfortunately, the increase in entry-level position wages did not change as much as union
workers had wanted them to, and the rates rose to between $14.78 and $19.28. All union workers

Nikole Cunningham
hired prior to 2006 were capable of making a maximum hourly wage of $28.12. This is a $2.52
decrease from the 2007 maximum of $30.64 (Ferla, 2011). Graphs of the wage changes and
anticipated decreases for 2015 are displayed below.
Maximum hourly wage for veteran workers over course of
contract period
Year All workers hired prior to 2006
Those workers hired after 2007
(the “new normal”)
1 961 19.72 n/a
1 97 0 24.75 n/a
1 982 22.55 n/a
1 990 27.85 n/a
1 996 27.30 n/a
2007 30.64 16.72
201 1 28.12 18.28 -19.28
201 5 25.94 16.86 - 17.79
http://www.remappingdebate.org/map-data-tool/putting-new-gm-uaw-contract-historical-context
Even though the contract was not 100-percent what all union members were hoping for,
the agreement still passed with 65-percent of General Motors production workers and 63-percent
of skilled-trades workers voting to approve the deal. Joe Ashton, the union VP in charge of
negotiations stated with great confidence, When GM was down, our members sacrificed and
saved GM. Now that GM is posting strong profits, our members, as a result of this agreement,
are going to share in the company’s success (Bunkley, 2011).”
Hourly wage for newly-hired workers
Year
Rate at start of employment
(“entry rate”)
Maximum rate attainable
over course of contract
1 961 18.97 19.72
1 97 0 23.58 24.75
1 982 19.17 22.55
1 990 23.66 27.85
1 996 19.11 27.30
2007 15.25 16.72
201 1 14.78 - 15.78 18.28 - 19.28
201 5 13.63 - 14.55 16.86 - 17.79

Nikole Cunningham
2015 Contract Negotiations
Since 2011’s negotiations operations had been on the up for both General Motors and the
United Auto Workers union. About 10,000 jobs were added, North America showed a profit of
about $6.6 billion in 2014, and GM invested millions into new equipment and facility upgrades
as well as new vehicle programs. GM and the UAW really had created a “win-win” situation for
themselves up to the 2015 negotiations by combining a focus on the competition as well as focus
on employees in the United States (UAW, 2015).
As stated previously, 2015’s contract negotiations focused on mandatory bargaining
subjects including wages and benefits. Voluntary bargaining subjects were also discussed and
comprised of keeping plants inside the U.S. instead of continuing to spread to other countries. As
upbeat and united as GM and the UAW were when negotiations first commenced, both sides had
strong desires to reach their goals.
The Tentative Agreement
General Motors and the United Auto Workers had reached a tentative agreement on the
25th of October, 2015. Although 55.4 percent of the hourly workers had approved the contract,
59.5 percent of the skilled trades workers were not in agreement. When investigated, reasons
behind the worker’s concerns were connected to, “…local trade agreements, reclassification of
trades, number of apprentices, concerns over outsourcing or loss of jobs, and absence of cost of
living increases and buyouts (Burden, UAW ratifies four-year GM contract, 2015).”
GM and the United Auto Workers union agreed that pipefitters, toolmakers, millwrights
and machine repairists could keep their classifications, even though they might be cross-trained
to help GM be more flexible. The skilled trade workers also believed that in clarifying the

Nikole Cunningham
language, their seniority rights would be better protected. Additional changes included allowing
pipefitter, millwright, toolmaker, and machine repair to apprentice classifications. The UAW
decided to ratify the agreement, even though not all skilled trades workers’ concerns were met.
GM’s skilled trades workers are not eligible for an early retirement incentive of $60,000 that is
being offered to nearly 4,000 other employees (Burden, UAW ratifies four-year GM contract,
2015).
The Union
The proposed agreement provided much satisfaction to the United Auto Workers union
representatives. The UAW understood that it could not get 100-percent what they wanted and
was willing to bargain most for higher wages and job security. In the end, the contract included
wage increases starting at $16.25 but maximizing at $19.86 (a .58 increase from 2011), an
$8,000 signing bonus for traditional and in-progression team members and a $2,000 signing
bonus for temporary employees. In addition, lump sums of $1,000 for eligible workers would be
administered in each of the next four years (Committee, 2015).
In efforts to keep jobs in the U.S., GM agreed to investments in twelve different plant
sites and created or retained 3,300 jobs. An additional win for the UAW involved
implementation of traditional health care for in-progression employees and a new health care
program for temporary employees. In efforts to preserve the overall increase in income, the
UAW was also able to continue the profit-sharing formula based off of $1,000 per $1 billion
profits in North America (Committee, 2015).
General Motors

Nikole Cunningham
The 2015 negotiations was all about giving back for General Motors. With the tentative
agreement keeping labor costs within an acceptable rate, GM was willing to give the UAW what
they wanted, at least to a certain point. The United Auto Workers were aware that they couldn’t
ask for higher wages without risking job security, and vis-a-versa.
General Motors did agree to increase wages for entry-level workers, but the wages for
veterans had not changed. Veteran worker wages were still well above entry-level workers,
breaking over $25 an hour. The lump sums that GM agreed to pay out were in in exchange for
the ability to keep starting wages down (Burden & Wayland, UAW to push for rich deal at GM,
2015).
Although the UAW had been concerned with GM pulling operations from the U.S. and
bringing them overseas, GM had already planned on $6.4 billion in investments in North
America. The tentative agreement showed General Motors promising $1.9 billion additional in
U.S. plants (Priddle & Snavely, 2015).
General Motors allowed for the creation/retention of 3,300 jobs for their new projects.
Along with job openings, GM made an agreement with the UAW to cross-train current
employees for multiple areas in the company. This not only provided more insurance for union
jobs, but also cut down costs for GM including benefits and wages (Committee, 2015).
Overall Assessment
General Motors is being very generous in the 2015 negotiations compared to those of
2007 and 2011. The main reason behind this is the high profit following the company’s recent
bankruptcy and the current success of their new vehicles. Even in the midst of their generosity,

Nikole Cunningham
GM managed to find a way to reduce costs and limit the increase of starting wages. I believe that
during the next contract negotiation in 2019, GM will have to be more restricting on their
bargaining in order to save the company more money.
The United Auto Workers union is always going to want higher wages and greater job
security. Especially because the overseas plants are doing so well and cost the company so little
compared to the United States. The UAW knows that the U.S. plants are still highly valuable to
GM’s success and that is why a peaceful relationship between the UAW and GM is so desirable.
In previous negotiations, specifically 2007, the UAW got the short end of the stick with
the two-tier pay system and the VEBA transfer to a trust fund. These were both big moves by
GM to unload a large amount of debt and save more money. The result were disgruntled workers
that believed neither their company, nor their union had their best interest in mind. Another large
sacrifice was the UAW’s no-strike clause during GM’s government bailout when many union
members’ wages were cut in half and others had to move far from their families for work
(Modica, 2012).
It seems as though General Motors attempted to make up for its shortcomings previously,
however not all union members are satisfied with GM’s idea of reimbursement. The stall in the
passing of the tentative agreement of 2015 shows that there was a divide in the union. The fact
that the UAW decided to ok the contract agreement anyways has created a strain in the union.
This case is similar to the 2011 agreement where many union members did not believe that GM’s
compensation was enough to correct the wrongs done to them (wage cuts, discontinuing jobs,
and closing plants) during the government bailout.

Nikole Cunningham
The UAW seemed very satisfied in the result of the 2015 negotiations, but I do not
believe they should anticipate future negotiations to be so positive. If the union continues to push
for higher wages and more job security, they better hope that North America’s sales continue to
be positive and that GM still feels like its overseas development is not more valuable.

Nikole Cunningham
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