This is an important issue not just for General Motors and Detroit, but communities and states across America. Local economies everywhere will be watching on GM and the UAW handle the issues before them.
General Motors Corp. and the United Auto Workers agreed to a new class of jobs that would pay about half the current rate, breaking with the UAW's tradition of equal earnings for union members, people with knowledge of the plan said.
Under a four-year accord reached Sept. 26, all new employees would start in so-called non-core jobs such as janitorial and maintenance work and make about $28 an hour in pay and benefits, compared with $51 for present employees, the people said. They asked not to be identified because contract details haven't been released.
The new hires would retain their non-core status until they obtain an assembly-line or other higher-rated job. The two-tier system, like an historic deal to transfer retiree health benefits to a union-run fund, marks another milestone in negotiations between the biggest U.S. automaker and the UAW.
UAW leaders are to be briefed today (9/28/07) in Detroit on details of the proposed contract, reached after a two-day strike. Union workers must ratify the agreement for it to take effect.
GM shares have risen 19 percent this year, in part on the expectation that the company would win more labor savings. The shares fell $1.18, or 3.1 percent, to $36.46 in New York stock Exchange composite trading yesterday.
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