- Associated Press - Tuesday, September 20, 2011

DETROIT — A new four-year contract deal between the United Auto Workers and General Motors Co. will add or keep 6,400 jobs in the U.S. but will keep GM’s costs in check by offering buyouts to longtime workers and replacing them with lower-wage hires.

Most workers won’t get annual pay raises, but will get at least $12,500 in bonuses, profit-sharing and other payments over the life of the contract. GM is offering some older workers up to $65,000 if they retire or leave early.

Union leaders from across the country were briefed on the deal in Detroit on Tuesday morning, and they voted to recommend that GM’s 48,500 factory workers ratify it. Workers are expected to finish voting on the deal by next Thursday.

The union will now use the GM contract as a template as it negotiates with Chrysler Group LLC and Ford Motor Co.

The deal creates more than 5,100 new assembly-line jobs and opens up 1,300 jobs for electricians, welders and other skilled workers. The skilled work is now done by outside contractors, but UAW workers will be able to bid on it. The union said much of the work is being brought back from Mexico.

“The auto industry is back. General Motors and the UAW are working together to create jobs in America,” UAW President Bob King said at a meeting of local union leaders in Detroit.

GM has agreed to invest $2.5 billion in its factories, including the re-opening of an assembly plant in Spring Hill, Tenn. Union-company teams also are identifying 760 more potential jobs and 1,400 more jobs for UAW-represented GM suppliers.

The agreement reached Friday includes a $5,000 signing bonus. Workers will get a minimum of $3,500 in profit-sharing next year and $250 per year for meeting quality targets. They also will get three $1,000 bonuses.

The profit-sharing formula is based on the company’s North American profits. If GM earns less than $1.25 billion, workers won’t get any payment. In 2010, GM earned just less than $5.7 billion in North America, which would mean a $5,500 profit-sharing check under the new formula. Under the old formula, workers got $4,300.

Wages for GM’s 1,940 entry-level workers, who now make about half the pay of longtime UAW workers, will go up 24 percent during the contract. Workers who now make $14.78 per hour will see their pay rise to $18.28.