GM promises UAW 5,400 jobs, $7B in US investment: What it means

General Motors' public outline of its contract offer to the UAW promises 5,400 jobs and $7 billion in U.S. investment over the next four years, but details behind that public overview are more nuanced.

People familiar with the offer, made to the UAW just hours before its 2015 contract expired Saturday night, told the Free Press about half of the 5,400 jobs would be new and the rest to be counted in the total would be considered retained because of new investment.

And, while the $7 billion would be invested in facilities with UAW representation, some would be joint ventures with contracts separate from the union's contract with GM. Also, not all of the money would come from GM.

Much of the offer remained on the table Wednesday, sources close to negotiations said. Talks resumed Thursday morning after continuing late Wednesday evening.

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Here's how some of the promised investment involving partners might work:

GM's Brownstown Battery Assembly Plant, located downriver west of Trenton, Michigan, assembles lithium-ion battery packs for the Chevrolet Malibu Hybrid and for Customer Care and Aftersales. The facility is a joint venture with Honda.

Brownstone employs UAW-represented workers, but they have a separate contract with the joint venture than the UAW has with GM. The workforce at Brownstone is paid less and has different benefits than UAW-represented GM workers, a source said.

An unknown chunk of the $7 billion could go to such joint ventures or entities with separately negotiated contracts, sources said. The UAW membership would likely oppose such terms because, over time as technology changes, those lower-paying joint ventures jobs could replace other, higher-paying, union jobs, one labor source said.

All the terms are still being negotiated.

GM declined to comment about the details of the proposed investment and jobs. The UAW also declined to comment about details under discussion.

In its statement Sunday, GM said: “We presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways and it is disappointing that the UAW leadership has chosen to strike at midnight tonight. We have negotiated in good faith and with a sense of urgency. Our goal remains to build a strong future for our employees and our business.”

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Wages, health care

Some details the Free Press has learned about are that the offer included a 2% wage increase for UAW workers for the first and third year of the four-year contract, and 2% lump-sum payments the second and fourth years. The 2015 contract increased wages 3% in the first and third year with a 4% lump-sum increase the alternate years.

Health care is one of the key points in the negotiations that contributed to the bargaining committee rejecting GM's initial proposal, sources have told the Free Press.

One person said GM has proposed that workers pay 15% of their health care costs, up from the current estimated level of 3% of health expenses. Another person familiar with talks said GM's offer preserves current health care benefits at the same cost.

GM and Ford each spend $1 billion a year on worker health care, which some industry observers consider unsustainable. The average U.S. worker pays about 28% of health care costs, according to the Center for Automotive Research in Ann Arbor, Michigan.

Plans for plants

GM has said in its offer it also offered solutions for "unallocated" assembly plants in Michigan and Ohio. That's in reference to GM's announcement last fall that it would idle two transmission plants, one in Warren, Michigan, and one in Baltimore; along with Lordstown Assembly in Ohio and Detroit-Hamtramck Assembly.

GM's proposed solutions would include building an electric pickup and batteries at Detroit-Hamtramck and a battery cell manufacturing facility in part of Lordstown. GM continues discussions to sell Lordstown to an investment group that includes electric truck maker Workhorse.

GM's public overview of its proposal also included investments in eight facilities in four states, additional new vehicle and propulsion programs, an improved profit-sharing formula, ratification payment of $8,000, and retention of health care benefits, including new coverage for autism therapy care, chiropractic care and allergy testing.

It was silent on two key UAW issues: Evening out pay for "in-progression" workers hired since 2007 who are paid less than legacy workers; and creating a path to permanent employment for temporary workers. GM is known to want more flexibility in using temps.

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This article originally appeared on Detroit Free Press: GM strike: Company promises UAW 5,400 jobs, $7B US investment in talks