The O.C.

BREAKING NEW.....New Contract....

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NEW CONTRACT BETWEEN BIG 3 AND UAW STUNS AUTOMOTIVE WORLD

Innovative agreement cinched by Wal-Mart inclusion

By BT Justice

April 1, 2007

The winds of change blew like a hurricane though Detroit this morning.

Just after midnight, a surprise announcement was made that a new three-year labor agreement had been hammered out between the United Auto Workers Union and the Big Three automakers.

The new contract with General Motors, Ford Motor Company and Chrysler Group contains unprecedented elements, including an alliance with Wal-Mart that gives UAW members a 50 percent discount on all purchases at the giant retailer.

The current contract expires September 14, so announcement of a new labor agreement five and a half months early was a surprise.

Before going into effect, the contract must be approved by the union’s members, but Ron Gettelfinger, UAW President, predicted, “Ratification is a slam dunk.”

The announcement was made at Solidarity House, the international headquarters of the UAW, in Detroit, with senior management of the three companies sharing the stage with the leadership of the UAW.

“From the beginning we focused on cooperation with the union,” said a joint statement issued by the CEOs of the Big Three. “Both we and the UAW leadership took a long-term view of actions that could save union jobs and save our companies.”

The statement was signed by G. Richard Wagoner, GM’s Chairman and Chief Executive Officer; Alan R. Mulally, Ford’s President and Chief Executive Officer; and Thomas W. LaSorda, Chrysler Group’s Chief Executive Officer.

In reaching agreement on a new contract, the automakers and the UAW made unprecedented concessions to each other.

Wages of UAW members will be cut more than 40%, to approximately $27 per hour including benefits, which is the average paid to hourly employees at U.S. plants of Asian and European automakers.

To compensate for the pay reduction, UAW members will receive a half-off discount for all purchases at Wal-Mart, though purchases must be made through self-check cashier stations.

“I’m not happy about pay cut,” said Jon-Jon Baumer, a 16-year employee at Ford’s Ohio Assembly Plant, in Avon Lake, Ohio and a member of UAW Local 2000. “But I’ll be able to buy a gallon of top-quality pickles for $1.49. You can’t beat that.”

A major concern of the UAW has been declining membership, which has fallen from 1.5 million members in 1979 to 540,000 members today.

GM, Ford and DaimlerChrysler, the parent of Chrysler Group, have agreed to assist the union in increasing membership by calling for federal legislation requiring all jobs at all automotive plants in the U.S. be unionized, and the contract will not be ratified until the legislation becomes law.

In addition, the three companies have agreed to UAW representation at all of their plants worldwide that are currently not represented by a union.

“This means we no longer oppose jobs going to Mexico, China and other countries because work will be done by UAW members,” said Gettelfinger, who predicts UAW membership will more triple this year because of the new contract.

Another concession made by the automakers is to transfer overseas any UAW member whose job in the U.S. is eliminated, along with up to five family members.

“Many of our rank-and-file are excited about the prospect of moving out of rust-belt cities to areas with better weather and better food,” said Gettelfinger. “Who wouldn’t jump at the chance to live in China or India?”

Other notable factors of the contract:

• A requirements that all salaried employees work five days per quarter in a manufacturing plant and earn UAW wages, rather than salary, during that time

• All salaried employees will become honorary UAW members and pay UAW dues

• Bonuses will be paid to salaried employees only in years in which their company’s market share increases.

“It’ll be fun to watch the white-collar guys find out what real work is like,” said Bonnie Le Casque, a member of UAW Local 909, who works at GM’s powertrain plant in Warren, Mich.

“To be honest, I think I’ll enjoy going over to the Gear Jammer and having a beer with them at the end of a shift,” added Le Casque. “But I’m not looking forward to the re-work we’ll end up doing because of them.”

The deal also allows Wal-Mart to purchase cars and trucks at a significant discount. The terms have not been announced, but some analysts predict Wal-Mart will begin selling vehicles as well as parts at its 1,075 Wal-Mart Discount Stores, 2,256 Wal-Mart Supercenters and 579 Sam's Clubs in the U.S.

“The new contract is win-win-win-win-win,” said Jason Vines, Chrysler’s vice president of for communications.

“That’s five wins if you weren’t counting. The Big Three reduce costs, consumers buy our products for less, the union increases membership, Wal-Mart increases sales and profits by retailing vehicles, and UAW members receive unprecedented purchasing power at Wal-Mart,” said Vines. “As everyone knows, if Wal-Mart doesn’t have it, you don’t need it.”

Not only is the new labor agreement unique, but the process that led to it was equally extraordinary.

Formal contract negotiations were not anticipated to begin until June, but each of the automakers has been holding preliminary discussions with the UAW for about a month.

On the evening of March 15, a Wal-Mart manager in Auburn Hills, Mich. noted a large purchase of pizza, potato chips and soda made by a DaimlerChrysler employee, who explained the food was for the contract negotiation team at Chrysler’s nearby headquarters.

“The next day, a plane load of managers from Bentonville showed up with food, coolers and a couple propane grills,” according to Vines.

“Discussions took a sharp turn for the better, and we had so much food we decided to invite over the negotiating teams from GM and Ford,” said Vines. “The rest, as they say, is history.”

Because the announcement of the new contract took place in the early hours Sunday, many news organizations did not have representatives in attendance.

Further details of the new agreement will be released tomorrow.

(April fools my friends!)

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lol, nicely done. Although you lost me at the point where you made the 1.49 pickles comment, along with the required UAW membership thing :P

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Great, now the unions leaders will read this and like the wal-Mart discount idea and then demand it.

:rotflmao: :rotflmao: :rotflmao: :rotflmao:

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You woulda had me if the typo didn't say "BREAKING NEW." No self-respecting news person would have misspelled that. :)

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You woulda had me if the typo didn't say "BREAKING NEW." No self-respecting news person would have misspelled that. :)

And how many news people are self repecting? :AH-HA_wink:

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And how many news people are self repecting? :AH-HA_wink:

Very true. Although, come to think of it, it's the rest of us that don't respect THEM so maybe they all *do* actually respect themselves. :P

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Nice, but you didn't get me.

When I finished reading the first paragraph, I just scrolled down and saw "April Fools" and I was like "of course..."

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Very creative and enjoyable, with glimmers of validity here and there.

Kudos to The O.C. for the effort. :thumbsup:

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Had me fooled right up until the point where the other Big 2 were invited to the talks near the end...and then I remembered April Fools. It was easy to get fooled as well when you read the topic on the 4th of April. Good Job O.C.

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I knew this was a joke as soon as I saw "Wal-Mart" and "April 1".

Joking aside, though, consider the consequences of this. In this scenario, a union guy gets paid 40% less, but gets half-off on anything bought at Wal-Mart. At my local Wal-Mart, you can buy pretty much whatever you can buy at any Wal-Mart. Which is, just about everything except for groceries, unless it's a Super Wal-Mart. Union Guy probably doesn't need most of the stuff he buys at Wal-Mart.

But Union Guy still has bills to pay, and 40% less money to pay them with. Unless Union Guy is spending 80% of his money (before the new contract) at Wal-Mart or on goods that could be purchased at the retail chain, he is most certainly forced to concede with the hypothetical new contract.

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