UAW, GM-Ford contracts focus on saving jobs Essay

Increasing worker job security was the primary goal in the United
Auto Workers’ (UAW) bargaining with General Motors Corp. (GM) and
Ford Motors Co. The first settlement, with GM, established a Job
Opportunity Bank-Security Program described by the union as
“without equal in the history of collective bargaining with a major
U.S. corporation.”

After the GM settlement, which was preceded by a strike at some
locations, the UAW and Ford settled without a strike. Terms for the
115,000 Ford workers were essentially identical to those for the 350,000
GM workers, except that the Ford contract bans plant closings. Ford
appartently was willing to accept this ban because it produces
substantially fewer of is parts than GM, and therefore is not as likely
to increase outside purchases, which could less to plant shutdowns.

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The new Job-Security Program guarantees that workers with at least
1 year of service will not be laid off as a result of the introduction
of new technology, “outsourcing” (procuring parts from other
manufacturers), negotiated productivity improvements, shifting of work
from one GM plant to another, or the consolidtion of component
production. Layoffs for other reasons–such as declines in vehicle
sales or sale of a facility–are not covered. The progam will extend
through the new and succeeding contract or until GM’s commitment of
$1 billion is exhausted. (At Ford, with fewer employees, the commitment
is $300 million.)

Facing a layoff, workers will first exerciese their right to
“bump” less senior workers. After this procedure is
completed, any employees with at least 1 year of service who would
ordinarily be laid off will participate in an Employee Development Bank,
where they will receive the pay rate of the last job they held or if
assigned to another job, the rate for that job. Other possible
assignments for bank members include job training; replacing another
worker undergoing training; moving into a job opening at another GM
plant if there is no qualified worker with recall or rehire rights; and
moving into jobs within or outside the local bargaining unit, including
“nontraditional” job Temporary assignments outside the local
bargaining unit will be voluntary. Permanent transfers to UAW
bargaining units at ohter GM plants will be filled by volunteers, if
possible. Any remaining openings will be filled in inverse seniority

Changes in the bank size will not correspond to changes in
production volume, but will be reduced by one for each bank member who
quits GM or otherwise breaks or loses seniority (excluding discharge) or
enters apprenticeship or other training; transfers to an opening in the
local plant or another GM plant created by a reason other than a
production volume increase; or transfers to a salaried job.

Employees who do participate will continue to accrue pension
credits and be covered by all other regular benefits, such as insurance,
and paid holidays and vacations.

the Job-Security Program will be administered by joint UAW-GM
committees at the local, area, and national levels. The national
committee is permitted to set up special programs when there are more
employees in the bank at a plant than anticipated openings at the local
and area level. These programs would provide pensions calculated at
unreduced rates and various supplements to departing bank members who
are age 55 to 61 with 10 years of service. Departing bank members who do
not meet the age and service requirements would receive lump-sum
payments of $10,000 to $44,000, based on seniority.

The union did not win its demand for a ban on outsourcing or a
continuation of the provision (adopted in 1982) prohibiting GM from
closing plants due to outsourcing. However, GM must give the UAW 60
days’ notice of outsourcing decisions affecting 25 or more existing
jobs. Previously, the requirement applied to decisions affecting 10
percent of a plant’s work force, or 100 workers, whichever was
less. Job preservation also will be on the agenda of the new local
Job-Security committees, which will discuss “sourcing” issues,
review competitive conditions, and develop plans to improve local
operations. Also, GM agreed to recommend implementation of the Saturn
small car program to the GM board of directors, assuming that production
concepts conceived by a GM-UAW study team prove workable. The joint
attempt to revolutionize domestic car production to counter the
increasing inroads of foreign manufacturers was initiated in 1982.
Other layoff assistance. There also were improvements in the Guaranteed
Income Stream and Supplemental Unemployment Benefits programs, both of
which provide employees with a financial cushion if they are laid off.

Funding of the Guaranteed Income Stream was raised to a maximum of
$185 million plus additional amounts from the profit-sharing plan during
the contract term. (The funding level was $100 million under the 1982
contract.) The plan covers workers with at least 10 years of service
who are laid off due to a plant closing and those with at least 15 years
of service who are laid off for any reason. After their Supplemental
Unemployment Benefits entitlement is exhausted, these workers draw
Guaranteed Income Stream benefits until they retire or return to work,
or until GM’s maximum financial obligation is reached. The weekly
Guaranteed Income Stream benefit is 50 percent of the individual’s
weekly base earnings on the last day of work plus 1 percent for each
year of seniority above 15 years. The maximum benefit is the lesser of
either 75 percent of base earnings or 95 percent of after-tax earnings
minus $12.50 ($17.50 on or after January 1, 1985).

GM’s financing of Supplemental Unemployment Benefits was
increased to a range of 19 to 31 cents per compensated hour in January
1985, 20 to 32 cents in January 1986, and 21 to 33 cents in January
1987. Previously, the obligation, which varies with the level of the
fund, was 17 to 29 cents per hour. The Advance Credit Account, which
provides benefits if the regular fund is exhausted, was strengthened by
increasing its “base” to $200 million, from $100 million. Any
GM payments into this fund are offset aginst future obligations. Funding
also was strengthened for the Guaranteed Benefits Account, which pays
benefits to laid-off workers with at least 10 years’ service if the
regular and Advance Credits Accounts are depleted. GM payments into this
account are not offset against future obligations.

In another move the union described as a “first,” GM and
the UAW will jointly develop and launch new businesses aimed at
providing jobs for UAW members. The program, to be financed by GM up to
a maximum of $100 million, will be administered by a joint Growth and
Opportunity Committee. Proposals for ventures, including those made by
local Job-Security Program committees, will be studied by a New Business
Benture Development Group, which will have a full-time staff. Ventures
will be aimed at aiding communities hit by job losses at GM facilities,
with hiring preference given to the affected workers. Overtime
restricted. The union, which in recent years has been pressing for
curbs on overtime to spread the available work among as many workers as
possible, won a requirement that GM pay 50 cents per hour for all
overtime hours in excess of 5 percent of straight-time hours into the
Joint Skill Development and Training Fund. In a related provision, GM
agreed to a goal of reducing average weekly overtime by 2 hours.
“Spreading the work” also was furthered by the addition of
three paid holidays, bringing the total to 44 over the 3-year contract,
which ends on September 14, 1987.

The overtime work penalty payments into the Joint Skill Development
and Training Fund, and a 10-cent-an-hour contribution by GM for all
hours worked, will help finance training for active and laid-off
employees. Laid-off workers are eligible to receive tuition assistance
ranging from $1,500 for those with 1 year of service to $5,000 for those
with 4 years or more of service. Active employees are eligible for
payments of $1,500 a year for courses at colleges and universities and
$1,000 a year for other job-related courses and certain other training
in accredited schools.

The settlement does not provide for specified wage increases in
every contract year. This reflects company efforts to end the practice
of providing guaranteed annual wage increases regardless of corporate
financial results. The workers will receive one specified wage increase
and a $180 “Special Payment,” effective immediately; lump-sum
“Performance Bonus” payments in October of 1985 and 1986;
continued automatic pay adjustments under the cost-of-living formula;
and continued profit-sharing distributions. The union forecast that the
combined yield would be $11,730 over the term (including $3,000 in
profit sharing), assuming a 5-percent annual rate of increase in the
Consumer Price Index and continuation of the projected 1984 profit
level. This would contrast with the 1982 accord, which only provided
for cost-of-living adjustments and profit-sharing distributions.

The immediate specified wage increase ranged from 9 cents an hour
for the lowest paid workers to 50 cents for the highest paid. According
to the union, the 9- to 50-cent increase plus the projected future
cost-of-living adjustments will raise the range to $13.93 for workers in
the lowest bracket to $16.20-$16.47 for those in the top bracket. Prior
pay rates, including a cost-of-living allowance, ranged from $12.29 an
hour for workers in the lowest pay bracket to $17.19-$17.46 for those in
the top bracket.

The performance bonuses, to be paid in October of 1985 and 1986,
will amount to 2.25 percent of pay for all compensated hours, including
overtime hours (but not overtime premium pay), vacation and holiday pay,
and shift premiums. The union estimated that the payments would be $725
and $750, respectively, using the assumed 5-percent inflation rate and
compensated hours equivalent to the 1983 total.

The cost-of-living adjustment formula provides for 1-cent-an-hour
quarterly adjustments for each 0.26-point movement in the BLS Consumer
Price Index for Urban Wage Earners and Clerical Workers (1967 = 100),
with 1 cent permanently diverted from each of the firest nine
adjustments, and 2 cents from each of the two other adjustments. The
diverted money will help offset GM’s cost increases for benefits.
Previously, adjustments were computed at 1 cent for each 0.26-point
movement in a composite 1967 = 100 index derived from the U.S. and
Canadian consumer price indexes. (The change was made because the
formula for GM’s Canadian employees is now linked to the Canadian
government’s index only.) Under the 1982 contract, each of the
first three quarterly adjustments were deferred for 18 months and a
total of 6 cents was permanently diverted from these adjustments. Other
contract provisions. The new contracts also provide:

* A $3.85 increase in the pension rates over the term for workers
retiring from October 1, 1984, through September 30, 1985, bringing
their April 1, 1987, range of rates (which vary by preretirment
earnings) to $21.85-$22.60 a month for each year of credited service; a
$3.95, through September 1, 1986, bringing their range to $21.95-$22.70;
and a $4.05 increase for those retiring on October 1, 1986, or later,
bringing their range of rates to $22.05-$22.80. The provision for
“30 [years]-and-out” retirement was revised to provide total
monthly benefits of $1,185 for employees who retire from October 1,
1984, through September 30, 1985, $1,195 for those who retire from
October 1, 1985, through September 30, 1986, and $1,205 for those who
retire later. The benefit consists of a pension amount and a
supplemental payment; the supplement ceases at age 62. There also were
improvements in benefits for current retirees, including a $1 increase
in the calculation rate for normal benefits. Employees who retired
prior to October 1, 1984, with at least 30 years of credited service
will receive special $200 payments in December of 1985 and 1986.

* Addition of a third type of optional health insurance coverage,
some improvements in the existing “traditional” and Health
Maintenance Organization plans, and adoption of
“preauthorization” and review procedures to preclude
unnecessary surgery and shorten hospital stays. According to the union,
the new Preferred Provider Organization coverage provides a broader
range of benefits than the existing plans “while maintaining
quality safeguards and assuring effective, affordable, and
cost-efficient delivery of care.”

* An increase in GM’s payment toward Medicare Part B premiums
from the $13.50 a month to $14.60 on October 1, 1984, and $15.60,
$17.60, and $19.60 on January 1 of 1985, 1986, and 1987.

* The range of services provided by the legal services plan was
increased and the eligibility requirement was reduced to 12 months of
service, from 18. These changes, and others, were financed by a $17
million surplus that had accrued during the 1982 agreement, which
established the plan. GM will continue to finance the plan at the rate
of 3 cents per straight-time hour and, in a change, it will provide any
additional money needed to maintain the plan. (At Ford, a legal
services plan was established under the 1984 settlement.)

* Adoption of a bonus plan to improve attendance. Beginning in
1985, employees will receive $50 for each quarter year in which they
work all scheduled straight-time hours in the regular workweek. Those
who receive three quarterly bonuses in a year will receive an additional
$150 for a combined total of $300 and those who receive four quarterly
bonuses in a year will receive an additional $300 for a combined total
of $500. This bonus provision was one of the changes to the 1982
attendance plan, which continues to penalize workers who have excessive
unwarranted absences by reducing their holiday, vacation, and other
benefit entitlements. The resulting $9 million benefit cost saving that
had accrued during the 1982 contract was transferred to an existing
national training fund.

* An increase to 25 cents (previously 20 cents) in the hourly
premium paid to employees for all hours worked in continous 7-day-a-week

* Increases in the relocation allowance to employees who transfer
to any other GM plant when there is a shift of major operations from
their home palnt to another GM plant. The allowance now ranges from
$580 for single employees moving 50-99 miles to $2,310 for married
employees moving 1,000 miles or more, compared with the previous $500 to

* Revision of the employee stock ownership plan to provide for GM
financing equal to 0.5 percent of employees’ pay. Previously,
financing varied with GM’s spending on plant and equipment. In
another change, dividends will be distributed annually instead of
accruing until retirement or other termination of employment.

* Establishment of an experimental child-care program at one
location. The program will assist employees in obtaining child-care
services “appropriate for each employee’s particular

The bargaining leading to the September 21 settlement at GM began
in July. Initially, the union was concurrently negotiating with Ford,
but reverted to the usual “divide and conquer” strategy by
suspending talks with Ford and focusing on GM. Intense bargaining
continued to the September 14 expiration date of the contract, but the
parties were unable to reach agreement and the union struck GM’s
Warren, MI, technical center and 12 assembly plants in nine States,
purportedly over local issues. Apparently, the union struck these key
facilities, rather than calling a company-wide strike over national
issues, because a companywide stoppage could not be ended until a
settlement is reached and approved by a majority of all UAW members at
GM. A companywide strike also would have been a greater drain on the
union’s $563 million strike fund. The stoppage was later extended
to four additional plants, bringing the total number of strikers to
91,000. At that time, an additional 19,000 GM employees were on layoff
because of shortages resulting from the strike. Immediately after the
settlement, employees began returning to work. The national terms were
approved by the UAW’s 300-member council; then members of the 149
local unions approved the contract, 138,410 to 102,528.

Following the GM settlement, Ford and the UAW resumed negotiations.
A settlement was reached in mid-October, ending a marathon 24-hour
bargaining session. Ford workers approved the agreement by a vote of
33,312 to 18,386.

Despite the settlements on companywide issues at GM and Ford,
bargaining was continuing on local issues. In these talks, conducted by
local union and plant officials, the companies were attempting to offset
part of the labor cost increase resulting from the national accords by
pressing for changes in staffing levels, job assignments, output
requirements, and other areas.

UAW President Owen Bieber said he would ask Chrysler Corp. to
reopen negotiations for 65,000 workers despite the fact that the current
2-year contract is not scheduled to expire until October 1985. A
company official said Chrysler would listen to a reopening proposal
because “there may be some things that we would like them to do for
us.” Coal settlement peaceful

Despite a change in union leadership, splintering of the management
bargaining group, high unemployment, and a history of long, bitter
strikes, the United Mines Workers (UMW) and the Bituminous Coal Operators’ Association (BCOA) settled peacefully on a 40-month
contract. Both sides exulted in the new spirit of cooperation and
indicated that it will continue as they attempt to deal with problems,
which stem from increased foreign competitions; easing of the petroleum
crisis, which has slowed the shift to coal as a fuel for power plants
and other facilities, and also slowed the development of a national
“synfuels” energy policy; growing production by nonunion domestic producers; and possible legislation to counter “acid
rain” that could reduce coal burning.

Bobby R. Brown, chief executive officer of Consolidation Coal Co.
and head of the BCOA, described the agreement as “fair and
modest,” and noted that it gives the industry an 80-month period
(from the 1981 settlement to the January 31, 1988, termination date of a
new contract) without a national strike. This, he said, will give a
“clear message to our customers and competitors” that the
industry is a dependable energy source.

Rich Trumka, the coal miner-attorney who won the presidency of the
union in 1982 on a promise to stabilize and revitalize the union after
years of chaos, said the new contract, has “no concessions,
absolutely none. Not a single one. We made economic . . . [and] other
gains.” Delegates to the union’s prebargaining convention had
given Trumka a simple mandate for the bargaining: “No backward
steps. No takeaway contracts.”

During the negotiations, which began in April, the union had
indicated that it would settle on modest economic gains if the mine
operators accepted other terms designed to cut unemployment. (About
one-third of the industry’s 160,000 UMW members are unemployed.)

The contract provides for a total of $1.40 an hour in wage
increases (compared with $3.60 over the 40-month term of the prior
contract) consisting of 25-cent increase on October 1 of 1984, 1985, and
1987, and a 30-cent increase on October 1 of 1986. In addition, workers
will receive 5 cents “quarterly” wage increases on January 1,
April 1, and July 1 of 1986 and 1987, and on January 1, 1988. These
increases will result in hourly rates ranging from $13.924 to $15.565
for underground workers at deep mines (who are paid for 8 hours per
shift), $14.946 to $16.328 at strip and auger mines (7.25 hours’
pay), and $14.907 to $15.514 at preparation plants and other surface
facilities at deep or surface mines (also 7.25 hours’ pay). These
increases ranged from 11.2 percent (for the lowest paid workers) to 9.9
percent (highest paid) for underground workers, 10.3 to 9.4 percent for
strip and auger workers, and 10.4 to 9.9 percent for preparation plant
and related workers.

The UMW did not win the curbs on overtime it had sought to increase
the number of jobs available for its members, but it did gain changes in
other provision intended to increase job security:

* New language ensures that miners will not lose their bidding
rights to a job at their mine because the mine has been subleased to
another company. The union had charged that in many cases new operators
had used loopholes in the contract language to evade hiring incumbent

* Mine owners are not required to give local union officials copies
of warranties covering any onsite work being performed by outside
contractors. The union said this was necessary because some mines were
contracting out work that should have been performed by UMW members.

* UMW members shall perform all work “of the type”
customarily done at the mine. The u nion said this provision was
necessary because some mine owners had previously been able to contract
our some work because it was not the exact work performed by UMW

* A company is required to notify the union of the sale of a mine
where a UMW contract is in effect and to furnish proof that the buyer
will abide by the terms. Previously notification was not required and,
the union claimed, some new owners were able to “break” the
labor contract.

* The BCOA and UMW will establish a “Joint Interests
Committee” to promote the development and use of UMW-mined coal.
The committee, which replaces the “Joint Industry Development
Committee,” will undertake activities such as contesting acid rain
legislation, developing coal export capabilities, and developing a
coal-based national energy policy.

Benefit improvements included a $10 a month increase in pensions
for all current retirees effective immediately and on October 1, 1987.
Survivors of retired workers will receive $5 a month increases on the
same dates. For current employees, pension rates were increased by $1
for those retiring during after September 30, 1987. For the latter
retirees, pensions will be computed at the resulting rates of $17 a
month for each of the first 10 years of service, plus $17.50 a month for
each of the next 10 years, plus $18 for each of the next 10 years, plus
$18.50 for each year in excess of 30.

Other terms included a 20-cent-a-ton increase in the royalty paid
into the miner’s health and retirement funds by mine owners on coal
they produce; an increase in life insurance to $30,000 (from $25,000); a
$190-a-week sickness and accident benefit (formerly $185) increaseing to
$195 in the second year and to $200 in the third year; and $160 clothing
allowances on October 1 of 1984, 1985, 1986, and 1987 (under the prior
contract, the workers received three $150 allowances).

At the time of settlement, the BCOA comprised only 32 companies,
compared with about 130 at the time of the 1981 settlement. The
withdrawals occurred because some companies believed they could
individually negotiate more lenient terms. However, UMW President
Trumka announced that he would not bargain with companies that dropped
out until after the BCOA settled. The possibility of being struck while
the BCOA companies and others operated led many of the dropout companies
to sign letters of intent with the union in which they agreed to be
bound by the subsequent BCOA accord. Some did not sign the letters, but
accepted the BCOA terms immediately after they were announced. The few
companies that did not sign were briefly struck by 2,000 employees.

Meanwhile, bargaining was continuing between the UMW and the
Association of Bituminous Contractors, comprising companies that open
mines and build related facilities. This bargaining covers about 10,000
workers, most of whom were on layoff. City workers in Philadelphia

The City of Philadelphia and unions representing 13,600 workers
agreed on a 2-year contract that called for a single 8-percent wage
increase at the beginning of the school year. An arbitrator later
awarded 2,700 firefighters terms similar to the negotiated contract and
awarded a similar, but earlier, payment to 7,500 police officers.
Unions involved in the settlement and awards included the American
Federation of State, County and Municipal Employees (AFSCME), the
Fraternal Order of Police, and the International Association of Fire
Fighters. Grocery workers settle, avert walkout

A threatened strike by 65,000 workers was averted when nine locals
of the United Food and Commercial workers agreed to a 3-year contract
with the Food Employers Council, comprising 12 grocery chains with
stores in Sourhtern California.

Under the settlement, top-rated clerks witll receive increases
totaling 85 cents in their $11.70 an hour pay rate, General merchandise
clerks will receive increases totaling 59.5 cents if they were hired
prior to August 7, 1981, and 55.25 cents if hired later.
“Courtesy” clerks will receive a total of 30 cents. Another
pay issue was resolved when the employers agreed to guarantee each
employee at least 16 hours of work a week. The union, which contended
that 70 percent of the employees worked less than 28 hours a week, had
originally sought a 25-hour guarntee.

Management won a “favored nations” clause, contending
that the union had unfairly agreed to lower wage and benefit levels with
some chains that are not members of the council. The clause provides
that if one of the local unions and an independent store with at least
25 employees agree to reductions in labor costs, the same reductions
will be extended to the stores of the council members within the
jurisdiction of the local.

The 1,334 stores covered by the settlement are in an area extending
from San Luis Obispo to the Mexican border. The stores are owned by
Albertson’s, Alpha Beta, Boys, Hughes, Lucky, Mayfair, Pioneer,
Ralp’s Safeway, Smith’s Food King, Stater Bros., and Vons.
Employees rate coworkers’ performance

In an unusual move, Levi Strauss & Co. announced that it will
consider the opinions of fellow employees in determining who to include
in an impending layoff. A company official said, “Most of the
people who are laid off will clearly have not performed well enough to
be retained.” The new procedure will be useful in determining
which of the marginally satisfactory workers should be retained. The
layoff will total 400 employees. Under the new “Objective Judgment
Quotient,” each of the 2,000 executive, sales, and other nonunion
white-collar employees will be rated by a group of up to nine employees.
Members of each group will be selected by the worker being rated.

More than 300 factory workers have already been laid off because of
a decline in demand for blue jeans. The company announced that an
additional 2,500 will be laid off by mid-1985 as a result of the closing
of several plants and cutbacks at others. In this case, the employees
will not have a voice in retention decisions. These workers also are
not represented by a union.


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