Automobiles

Cake For Taxpayers And Bonuses For UAW Workers in the GM Deal

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Well, that was fast. Last week I wrote that the UAW would exhibit a streak of realism in its quadrennial contract negotiations with the Big Three this time, if for no other reason than it had no leverage (having lost its right to strike during the bailout), no leg to stand on (having brought the US automakers to the brink of bankruptcy) and was part-owner of at least two of the companies (having accepted company stock in lieu of cash for the health care trust fund for retirees). This week, the details of the contract that the UAW just negotiated with GM are seeping out and they prove that I couldn't have been more wrong.

The union asked for the moon—and pretty much got it.

The deal will give each of GM's 48,500 hourly workers: $5,000 bonuses just for signing the contract plus a profit-sharing payout of at least $3,500 for this year plus additional bonuses if GM meets its profit targets.

If this is not making you wish you were a senior GM worker, consider this: Workers will also get up to $2,000 for two hearing aids every three years and $200 for a first wig in the event of chemotherapy and "and up to $125 thereafter."

GM's rank-and-file workers are expected to ratify the contract although they are not ecstatic about it because, evidently, they still haven't gotten back everything they "sacrificed" during the bailout restructuring.

And what will GM get in exchange? It will no longer be on the hook to offer automatic cost-of-living adjustments, although it will have to give each worker $1,000 in "inflation protection" every year for the duration of the contract. In addition, it will be allowed to buyout older workers and replace up to 25 percent of them with cheaper newer workers, something that will allegedly allow it to lower its fixed labor costs. Oh, and that job bank that paid laid off workers 90 percent or so of their wages for not working, that's truly gone. GM doesn't have to reinstate that.

The deal is being hailed as a "win, win" for GM and the unions and the auto industry in general. There is more than a touch of hype in how much of victory the deal really is for GM, I suspect. After all, every dollar GM has to give in bonuses and hair prostheses to its workers is one dollar less it has for improving its product line and grabbing market share from the Hyundais and Kias of the world whose labor costs are still way lower than GM. Be that as it may, there is no doubt that there is one party for which this deal is definitely not a victory: Federal taxpayers.

They stand to lose $14 billion just on the principal if they manage to sell their outstanding stock in GM for $43 a share or so. But GM's stock price has fallen about 50 cents since yesterday and was hovering around $21.50 this afternoon after the details of the deal became available—all of which suggests that at least so far the market doesn't think much of GM's comeback strategy.

So don't count on any bonuses or returns on investments, fellow taxpayers, just grab your wallets and eat some cake.

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  1. The deal will give each of GM’s 48,500 hourly workers: $5,000 bonuses just for signing the contract plus a profit-sharing payout of at least $3,500 for this year plus additional bonuses if GM meets its profit targets.

    And all with the taxpayer’s money.

    I’ll never buy a GM car. Not even a used one.

    1. “The deal will give each of GM’s 48,500 hourly workers: $5,000 bonuses just for signing the contract”

      How is this not bribery?

      1. It’s an incentive…we are capitalist here.

    2. I would never have bought a GM just because they are such pieces of shit, but this just makes my avoidance that much stronger.

    3. No taxpayer money involved at all..R U seriously that uninformed.

  2. The deal is being hailed as a “win, win” for GM and the unions and the auto industry in general. There is more than a touch of hype in how much of victory the deal really is for GM, I suspect. After all, every dollar GM has to give in bonuses and hair prostheses to its workers is one dollar less it has for improving its product line and grabbing market share from the Hyundais and Kias of the world whose labor costs are still way lower than GM.

    Are you… are you insinuating that government bureaucrats and their enablers in the media are clueless about… about… *gasp* … opportunity costs?

    Say it ain’t so, Shoeless!!!

  3. Who do I have to see to sell my handful of shares?

    1. Can I trade them for Swiss francs or Swiss guinea pigs or something that will hold it’s value.
      http://marginalrevolution.com/…..rland.html

    2. Call the broker you used to buy them…

    3. Fuck that now that they’re worthless, how about a shareholder derivative suit?

  4. The deal will give each of GM’s 48,500 hourly workers: $5,000 bonuses just for signing the contract plus a profit-sharing payout of at least $3,500 for this year plus additional bonuses if GM meets its profit targets.

    Basically, GM workers can simply stop whatever they’re doing right now until the end of the year and still receive $3,500.00 in “profit sharing” bonuses – I mean, is [state] capitalism great or what??

  5. Congress should investigate whether anyone inthe Administration weighed in on this thing. It bears every earmark of yet another Obama union payoff. Chicago politics, baby!

    1. The unions do sure seem to be making out like bandits lately, huh? Imagine that.

      Fucking disgusting.

      1. Yes it is. All these people know is how to punish their enemies and reward their cronies. They literally know how to do nothing else.

      2. Re: Episiarch,

        The unions do sure seem to be making out like bandits lately, huh?

        What do you mean “like”?

        We will need a new metaphor for the new times… like “They made out like union workers.”

      3. You are more than welcome to come stand your feet 8 hours a day hustling after a vehicle down the line for $15 an hour. Me thinks if I came to your work and watched you, my bet is you are getting more than what you deserve.

        1. I did it for 3 summers at the Framingham plant. The easiest, most mind-numbing job ever.

        2. You are more than welcome to come stand your feet 8 hours a day hustling after a vehicle down the line for $15 an hour. Me thinks if I came to your work and watched you, my bet is you are getting more than what you deserve.

          I made some choices in life to guarantee I never have to do that; I am sorry you didn’t. But me thinks that there are 100 people in Detroit who would do your job for half that amount. Are they getting what they deserve?

  6. God, I love my new (used, actually) Ford Focus. Burn in fucking hell UAW, GM.

    1. I wonder if they’ll try to force Ford to the same terms or go on strike.

    2. Weird UAW Ford workers make more and have better benefits with no concessions…We at GM applaud their hard work

      1. My (awesome) Ford Focus was made in Mexico.

  7. When the tax payers are footing the bill, everybody wins!!

    1. $5,000 each comes out to $242,500,000.

  8. Nice deal.

    But I would still rather get the compensation package of one GM corporate executive than that of 50 GM union employees.

    1. Or one union boss.

      1. Union Officials do not make what the executives make, by any means. The top people in the UAW, namely the President and VP’s make just over 100k a year. There are no bonuses, and no other money coming to them unless they were employed by that auto-maker. Unless you work a TON of overtime, no other Union Officials (which have to be elected or appointed by an elected official) make what they make.

        1. And the top people in the AFL-CIO make closer to $300k.

          The difference: There are relatively few people who can run a large corporation effectively.

  9. The very notion of GM generating a “profit” is absurd.

    I could be more profitable if I didn’t pay my bills, too.

    I rented a Chevrolet Cruze, and put nearly 3500 miles on it. Everyone involved in bringing that car to market should be flayed alive and burned at the stake. What a piece of shit.

    1. “I rented a Chevrolet Cruze, and put nearly 3500 miles on it.”

      Amazing! They’re only built to last 2,000 miles.

  10. I still find it hilarious that GM can’t sell any Volts and they are dumbfounded as to why (well, some of them are anyways).

    GM cars have always been an absolute nightmare when it came to their electrical systems. I watched a S-10 catch on fire once because a few wires that were poorly installed had laid against a cylinder, which melted the wires, which left a live wire which ignited something flammable inside the engine.

    And now GM is building an ELECTRIC car? Fuck that. You couldn’t pay me to sit in one of those death traps.

    GM will never get to $43 a share and will soon be right back to the Federal trough for another round of bailouts. If President not my Fault is still around it will happen too, just watch.

    1. Bad electrical. British cars in the 70s when they were also built by nationalized companies had terrible electrics. Must be something about communists and bad electrics

  11. why are they leaving out thr retired seniors?? we retired with our contract and GM decided to take things away. we are out $1.200 of pension. plus. you guys that are going to retire in the next year–don’t count on your pension to stay intact. sandra eberhardt

    1. why are they leaving out thr retired seniors??

      Do they still get to vote on the deal? If not, then that’s why. They sold you out because they can. And yes, that means any future retiree is practically guaranteed to get sold out after retiring.

    2. Payback is a bitch. Before the retirees retired, they sold out the future hires in their previous contracts.

    3. why are they leaving out thr retired seniors??

      Because fuck you.

    4. Huh, the government gets involved, and suddenly promises get broken and obligations go *poof*.

    5. Sandra,

      Allow me to say this from the bottom of my heart. Fuck you. GM pensioners have gotten offered several buyouts, and anyone who wasn’t a gods damned moron could see the company was going under.

      It was your choice to avoid the buyout, and bet your future on the company surviving the leeches.

  12. Here’s another:

    Workers will get 63 paid holidays over the contract’s four years, including Election Day in 2012 and 2014.

    This is almost double what most American non-government workers get.

    1. Election days are holidays? WTF?

      1. Of course. It takes all day to vote 800 times.

    2. 2 fucking months of paid holidays. 2 fucking months.

      1. About 14 days a year. Most are traditional holidays, the rest are mostly for retooling and maintenance. Rarely does the plant go dark. Running full throttle 24/7 requires taking break to do maintenance. Sorry if that is upsetting to you.

        1. Running full throttle 24/7 requires taking break to do maintenance. Sorry if that is upsetting to you.

          Aren’t there some floors you could sweep when the line is down? Given your obvious mastery of the intricacies of compensation I am sure you factored paid holidays into your $15 an hour upthread. You do understand that GM doesn’t really pay you to do nothing, right? If you work 1,500 hours a year and get paid for 2,00 re-check the math on your hourly wage. And don’t forget to factor in all your other benefits.

          1. If you work 1,500 hours a year and get paid for 2,00

            Oh FFS. 2,000 hours.

  13. Hey, this is a big fuckin’ deal.

  14. Hurry up and sign before Solyndra becomes bigger news.

  15. We have to do this — the slugs were starting to talk about forming a union.

  16. Stop listening to the media bash the UAW and find out what union workers have given up since 2003 to help theses companies get back on track. They were all told these companies were going under then after all was given, ALL management got huge bonuses. What’s wrong with trying to make a better living for your family? Buy American and STOP sending money over seas!!

    1. Nothing, as long as you don’t extort money from me to do it. Which is exactly what you’re doing to GM customers and share holders.

      1. I’m a Ford worker. Built without your tax dollars.

        1. Yes, but it was built with backdoor loans from the Fed.

          1. Come on scruffy. What large co. doesn’t take loans? What’s wrong with a loan when its paid back? Nothing.

    2. Re: TC,

      What’s wrong with trying to make a better living for your family? Buy American and STOP sending money over seas!!

      Buying expensive, union-made shit does not help you achieve the first thing, TC.

    3. find out what union workers have given up since 2003 to help theses companies get back on track.

      The main reason GM and the other big three had to be bailed out (or in Fords case given sweetheart loan deals) was because Unions had made their labor costs completely unrealistic. When Honda can build a plant in Ohio and it costs them $4500 less in labor to build an Accord then companies like GM are fighting a losing battle, no matter what concessions the Unions make or what bailouts we taxpayers give. GM will NEVER turn a profit until this changes.

      1. Just blow the extra $4,500 on that Chrysler man. For your livelihood and that of your family.

      2. It cost less than 15% of a vehicles profit to pay union workers and benefits. 20 years ago CEO’s of big companies made on average 41% more than workers and America was in great shape. Now its gone up to 410% more. Corporate greed has a lot to do with it.

        1. What profit? GM and Chrysler went bankrupt and had to be bailed out, or don’t you remember?

          1. Look at what the CEO’s made that year. By the way I am a Ford UAW worker.

            1. 24 of the 25 UAW officers were paid over $100,000 in salary and expenses.

            2. So what? Your point about profits is bogus no matter what because there aren’t any. In any caase corporate profits aren’t a pie to be equitably divided between you and management.

        2. It cost less than 15% of a vehicles profit to pay union workers and benefits.

          You mean 15% of the overall vehicles cost, right?

          Your corporate greed point is completely irrelevant to the issue. GM isn’t failing because the CEO makes too much money, they are failing because they make shitty cars that no one wants that cost too much to make.

          1. Irrelevant to the issue? The issue is workers trying to make a better living for their families. At least keep what they are making. Isn’t that what we all want?As far as shitty cars that was true 10-20 years ago. Go look at consumer reports now. Fords are some of the best built vehicles on the road.

            1. The issue is workers trying to make a better living for their families.

              No, the issue is the GM/UAW deal that perpetuates the same problem that made GM bankrupt in the first place. In case you haven’t noticed, those of us without cushy union jobs are hurting a shitload worse than you, and hearing that GM workers just got a $5000 bonus when they still owe US taxpayers a shit ton of money is fucking infuriating.

              Fords are some of the best built vehicles on the road.

              I drive a 2009 Fusion. I love it. I respect the fact that Ford didn’t take straight bailout money, although they did get a pretty nice deal on a multi-billion dollar loan.

            2. “The issue is workers trying to make a better living for their families”

              I’m sorry, TC. This is horseshit. The issue is that companies like GM exist to produce goods that people like myself demand. They are not there to give you a better living.

              If you want a company setup to make you a better living for your family, by all means put some of your hard earned money down to start a business.

              Because you workers trying to make your lives better means that I have to pay more for a car and/or pay more of my taxes to the government. YOU are getting more money from ME. Why does your family get priority over mine? Hmmm?

              (Ford Flex owner, by the way. Love it dearly.)

      3. Labor cost are pretty small in the big picture…Get an internet connection and google a little bit..um maybe 5% of costs…If a company really wants make money keep an eye on the 95%..

        1. The other 95% gets tough when you have employees who don’t give a fuck.

        2. Another union guy who knows just how to run the company. There is never a shortage.

          1. They run GM now. We bought it for them.

    4. These days most of those “foreign cars” are built right here in America by American workers but even if they weren’t I’d still buy the best product at the best price. I don’t have an obligation to you any more than that worker in China or wherever.

    5. They “gave up” nothing. They made wage and benefit concessions because they had to do it — the alternatives were worse. Not to mention that they “gave up” stuff from the inflated baseline of all the above market wages and benefits they got before which, incidentally, bankrupted the stupid company. Also they make really shitty cars.

    6. “Stop listening to the media bash the UAW and find out what union workers have given up since 2003 to help theses companies get back on track.”

      And each day, union workers chose to keep working for those companies. Nobody asked them to do that — they chose to do it. If it was a bet, it was a bet; if they stayed because they considered their jobs to be something they were owed, then that was the reason. Maybe it was just too scary to think about going out into the big bad world and finding a job with a company that looked less like it was about to go tits up. Whatever the case, it doesn’t matter: whether by design, fear, entitlement, willful ignorance, or whatever, they chose to stay put.

      “They were all told these companies were going under then after all was given, ALL management got huge bonuses.”

      And still, union workers chose, each day, to keep working for those companies, enabling the very bonuses you are complaining about here. They could stop those companies immediately, if they so chose (they could not very easily be replaced, right?). But here again, they chose to stay on. And why? What is the combined fiscal power of all union members put together? Remember, they are the guys who know how to build things; they could shut down those companies and start new ones, any time they chose to, but the leadership would never tell them that. And I doubt they’d want it anyway; from the outside, it looks an awful lot like they just want their jobs, on their terms, because they deserve to have them, even if it means asking big daddy government to step in and make sure that happens.

      “What’s wrong with trying to make a better living for your family?”

      If you are interested in being accurate, then what you meant by “trying to make a better living for your family” was “getting the government to steal from your neighbors so that you can provide a better living for your family.” If you want to try to make the distinction that you work for Ford, go ahead and do that, but then you don’t get to generalize the situation with respect to the other players. People don’t appreciate having their money stolen and ‘invested’ for them, especially when they would not have undertaken the same investment themselves. And they clearly would not have, or I would not be typing this now.

      “Buy American and STOP sending money over seas!!”

      I happen to make all of my money from overseas — how patriotic is that? Do I have your permission, then, to spend some of it outside the US if I choose to? You’re here lecturing us on keeping our money in the states, so what does your own balance of trade look like?

      1. I’ll buy myself a nice American-made BMW, Honda, or Nissan.

  17. Buy American and STOP sending money over seas!!

    Fuck you.

    Real Americans buy what they want.

    1. I can see your a real bright person P. Brooks.

      1. You got something right, TC

    2. I LOLed. But mostly because it’s true.

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