GM labor deal heads toward UAW vote

Tue Sep 20, 2011 12:01am EDT

* UAW local GM leaders meet in Detroit to discuss deal

* Deal expected to include new jobs, profit-sharing

* UAW will turn focus to wrapping up Chrysler talks next

By Bernie Woodall and David Bailey

DETROIT, Sept 20 (Reuters) - About 48,500 General Motors Co (GM.N) workers at U.S. factories will begin considering the details of a proposed four-year contract on Tuesday that represents the first labor deal for the automaker since its 2009 bailout by the Obama administration.

Local leaders from the United Auto Workers union are scheduled to meet on Tuesday in Detroit to review and approve the deal, which will then be sent to a ratification vote by GM workers expected to be completed within a week.

That clears the way for UAW President Bob King to turn to Chrysler Group LLC, the smallest of the Detroit automakers, where contract talks broke off last week on the cusp of an expected agreement.

Chrysler Chief Executive Sergio Marchionne is expected to return to Detroit by Tuesday to resume talks with UAW President Bob King.

The GM deal is expected to provide a rough blueprint for contracts at Chrysler and Ford Motor Co (F.N), although total compensation at the companies is expected to differ more sharply than in the past.

Chrysler, which is controlled by Fiat SpA FIA.MI, has insisted that it hold the line near its current level of about $49 per hour in average wages and benefits. By contrast, GM and Ford are higher, at $56 per hour and $58 per hour respectively.

The UAW's four-year contracts with all three Detroit automakers expired last week. All three contracts were extended indefinitely as talks continued.

At stake are wages and benefits for about 112,500 unionized U.S. auto workers at GM, Chrysler and Ford, who have gone without a base pay increase since 2003.

The contracts will also set a benchmark for wages at auto parts suppliers and at nonunion plants operated by Asian and German automakers in the southern United States.

The talks in Detroit have played out at a time of increasing uncertainty about the strength of U.S. auto sales and the risk of another recession.

The outline of the proposed GM contract has become clear since GM and the UAW reached a deal late Friday, but details of the agreement have not been confirmed by either side.

Sources with knowledge of the proposed GM contract have said it includes recalling about 570 laid off GM workers, one-time bonus payments of about $5,000 and bringing new assembly work to an idled Tennessee plant that had been the home of the Saturn brand.

Workers hired at a second-tier entry level wage of about $15 per hour under the 2007 agreement between the union and U.S. automakers would also receive wage increases of about $2 per hour under the proposed deal.

The bonuses and profit-sharing were offered by automakers rather than traditional wage increases to prevent the rise in fixed costs that contributed to the industry's near collapse.

The UAW gave up its right to strike GM or Chrysler as part of the government bailouts.

Workers at Ford, which did not take a government bailout, have indicated that they expect a better deal than the one just negotiated with GM. Ford funded its turnaround on its own and workers retained the right to strike at the No. 2 automaker.

The UAW has hoped to use new labor agreements with the Detroit automakers as a springboard to winning first-ever contracts to represent workers at U.S. factories operated by Japanese, Korean and German automakers. (Additional reporting and Kevin Krolicki in Detroit; Editing by Steve Orlofsky)