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After almost seven weeks of contract negotiations in Detroit, Michigan, the United Auto Workers Union (UAW) and General Motors (GM) agreed on a new, four-year contract on September 20. The new contract includes pay raises for entry-level workers, and new healthcare benefits, as well as job creation and retention.
Current second-tier workers will earn $18.28 by the end of the four years. Starting wages will range from $14.78 to $16.53, depending on seniority. First-tier workers will earn $19.28 at the end of the four years. Starting wages for first-tier workers will be $15.78 to $17.53, also dependent on seniority.
New employees will also receive annual pay raises. At the end of a four year period, they will earn the same amount as current employees. How much they earn is based on which tier they are part of. They will also receive a $5,000 signing bonus as part of the new contract.
As part of the new contract, employees will be able to visit the doctor as many times they as they need and pay $25 for each visit. They will also have annual wellness physical exams, paid in full by GM. They will not have co-pay for emergency room or urgent care visits. Workers will also have improved dental care. Doctor’s visits were also extended to workers’ children.
Approximately 6,400 jobs that would have been sent to factories in Mexico will be created or saved for the US. Additionally, new products and jobs will be created at current factories in Tennessee, Michigan, and Montana, and a soon-to-be-determined factory in Indiana. The new jobs and products is the result of a $2.5 billion investment from GM.
The old contract expired on September 14 at 11:59 p.m. This was the first set of contract negotiations since GM filed for Chapter 11 bankruptcy in June 2009. President Obama urged the company to pursue aggressive budget cuts to avoid bankruptcy, but the company was unsuccessful. According to a CBS timeline of GM, the company had almost $200 billion in debt. In July 2009, the US government bailed out the company for $50 billion.
The UAW also began negotiations with Chrysler and Ford. Chrysler is expected to come up with an agreement with the UAW soon. The company agreed to extend its contract with the UAW, and they will continue talks. Ford has extended negotiations to mid-October.