GM and CAW reach agreement

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Unionist
GM and CAW reach agreement

[url=CBC.ca[/url]">http://www.cbc.ca/money/story/2009/05/22/gm-caw-deal.html][=red]CBC...

Quote:

Lewenza said the union and the automaker reached the tentative deal around 11 p.m. ET Thursday.

Voting on the agreement by union members is slated for Sunday and Monday.

"We have preserved our wages. We have preserved and secured our pension benefits," said Lewenza. "We have protected most of our core benefits." [...]

Pension issues were one of the major items, with Lewenza saying Friday that the union has agreed to a pension benefit freeze extending through 2015.

He pointed out that the pension plan for the workers is only 39 per cent funded on a windup basis

Union pension official Sym Gill said the pension shortfall is roughly $6.5 billion to $7 billion, adding that the pension is expected to be back on a fully funded basis in 10 years.

And showing who is really leading the bandwagon for concessions:

Quote:
"I’m hopeful when we look at the deal that all involved have made the difficult decisions necessary to create a viable company," Harper said.

Unionist

A little about the pension:

[url=http://newswire.ca/en/releases/archive/May2009/22/c6831.html]CAW news release[/url]

Quote:

The new agreement also includes a comprehensive restructuring of the
company's pension plan.

Through this plan, the company commits to move to funding its pension on
a solvency basis, moving away from the special funding loophole established in
1992 in Ontario (referred to as Section 5.1). Thanks to a combination of
upfront contributions and sustained funding commitments over the next several
years, GM's pension funding status will quickly reach levels comparable to
Ford and Chrysler in Canada.

"This deal will be an immense relief to the more than 25,000 retired GM
workers in Canada," said CAW President Ken Lewenza. "They will sleep much
easier tonight." [...]

Additional changes negotiated in the second round of talks with GM
include substantial workplace practices and productivity improvements, an
extra freeze in all pension levels (going out to 2015), and the details of
GM-specific deals regarding pensions and the new independent Health Care
Trust.

KenS

Its hard to say without seeing any detail at all. But I'm surprised it wasn't much worse.

If I understand correctly, the governments have agreed that bailout money will go to the pension underfunding. I'd say that's a heck of a lot better than the UAW pension fund getting GM stock for their shortfall. But I could easily be missing something.

The benefits that existing employees get also struck me as being less of a hit than what the UAW accepted- though that is difficult to compare.

Either the CAW was right that the all in hourly labour costs that others were waving around were incorrect, or management made a decision that up to a point how far the union wanted to go in cutting hourly costs was up to them.... because the elephant in the room is not the comparison to Toyota labour costs [which is an abstraction], but the comparison to cost cuts the UAW would agree to. In other words: "if you want to take your chance that your labour costs are OK for when it comes to rounds of factory and line closing decisions... thats up to you."

Tommy_Paine

I've been at a bargaining table with Sym Gill, many years ago.  I'm glad he is still on staff, and working on stuff like this.

We have a ratification meeting for our plant this sunday.  I expect a similar deal on the pension freeze to stave off the idea of a non-defined pension for new hires.  

Our pension plan is over 80% funded at wind up, the pension concessions made by my employer had more to do with current business dogma than it does with any real economic need.

Our negotiations had a lot of language regarding new hires.  Whether one agrees with those language issues or not, it's heartening that the company is thinking this way.   If they weren't sure they wanted to maintain this location, they wouldn't care too much about new hires, is my thinking.

 

Tommy_Paine

Well,  we ratified with over 80% in favour.  Like the G.M. deal, there's a five year freeze on the indexing of the pension.  Wage freeze. Co payments on prescription drugs, but capped. Lost semi-private hospitalization.  A week's holidays for two years. And everyone stays on a defined pension.

All things considered a pretty crappy contract,  but a damned fine one under the current circumstances.

So, this is out of the way.  Now, it would be nice if the fine people down at Service Canada started paying us work share.  They are approaching, what, six weeks late now.

 

 

Unionist

That's a relief, Tommy, thanks for the report.

I remember "work sharing" from about 15 years ago. We used it to avoid temporary layoffs of junior members by working a 4-day week, with the fifth day partially paid by EI. Same idea?

 

Tommy_Paine

Yes.  It's a pretty successfull program, actually.  I think the Obama administration is looking at implementing it in the States.

 

Unionist

There were some collective agreements in Canada in the Depression years which had clauses prohibiting layoffs before the workforce had all been reduced to some lower number of hours per week (around 30 maybe, but I'm guessing) - kind of a self-enforced work share but obviously with no relief in those days during the lost hours, no EI, no SUB plans... I question whether there's enough collective spirit today for workers to accept that. Of course, it would require some leadership, yeah right.

 

Fidel

What a disaster for the workers, a $15 to $16 dollar an hour wage cut! And that's on top of the previous $7 dollar/hr wage concession. The perpetrators of financial 9/11 in North America are laughing all the way to the bank.

Keep voting Liberal and Tory!! The workers will get more of the same anti-worker agenda from the two old line parties and weak unions. 

Unionist

Fidel wrote:

What a disaster for the workers, a $15 to $16 dollar an hour wage cut!

Ummm, there was no wage cut.

Quote:
And that's on top of the previous $7 dollar/hr wage concession.

Ummm, there was no previous wage concession.

Quote:
Keep voting Liberal and Tory!! The workers will get more of the same anti-worker agenda from the two old line parties and weak unions.

Workers are so stupid and brain-dead compared to you. Don't they realize that all they have to do is elect the ONDP again, and no more concessions, no more torn-up collective agreements, no more plant closures, heaven on earth? Just like the last time?

What would they do without the few lone prophets in the wilderness repeating the helpful mantras?

They do indeed owe you a debt of gratitude for showing them The Way.

By the way, if you're going to comment on specifics (like so-called "wage concessions") instead of just reiterating the usual mantra, perhaps familiarize yourself with the details. The workers will be lots more impressed with your Solution if they think you know what you're talking about.

Fidel

[url=http://www.cbc.ca/canada/story/2009/05/24/gm-caw-vote.html]The CBC reported:[/url]

 

Quote:

Specific details of the overall deal were not immediately known, but Lewenza said it delivers a $15 to $16 reduction in the average per-hour wage of GM's Canadian workers on top of a previously negotiated $7 cut.

 

So altogether the CAW and membership, McGuinty and the Harpers agreed to a $22 dollar wage cut. And that's if the bondholders go along, which they more than likely will not.

Unionist

Fidel, please don't embarrass yourself by talking about things you (and your CBC) don't comprehend.

Fidel

I think youve finally lost your mind.

"...wages and pension benefits are protected..."

"...a $15 to $16 reduction in the average per-hour wage..."

They seem to be having it both ways here.  And it looks like GM will declare bankruptcy by June 1st, which will trigger new contract negotiations, more concessions...

Unionist

The fact that you think a worker could have his hourly wage cut by $22 shows that you have no clue what workers earn. Big 3 auto workers earned on average $34.00/hour before this past year's round of concession bargaining started. How much do you think they will earn per hour now, Fidel? $12.00?

 

Fidel

I think it's taken out of the total workforce payroll, including benefits. Total concessions equalling $15 or $16 dollars an hour. I dont know what the final average pay cut might look like on every pay cheque. Do you?

I think when youre reduced to being a slavish apologist for the two old line parties, it's time to cash out. Objectivity is absent at that point.

KenS

Fidel wrote:

So altogether the CAW and membership, McGuinty and the Harpers agreed to a $22 dollar wage cut. And that's if the bondholders go along, which they more than likely will not.

The CAW agreed to concessions that will save $7/hour in total labour costs in the earlier agreement, and another $15/hour now. As Unionist said, there is no wage cut.

And when you brought up the contingency on the bondholders in the other thread on the subject, I pointed out that it is not contingent on what the bondholders do, and that the agreement is designed to stand when there is a bankruptcy filing. Having replied such in less than an hour after your statement, and you making anoter post in the thread also within an hour, one hopes you read it.

KenS

Fidel wrote:

I think it's taken out of the total workforce payroll, including benefits. Total concessions equalling $15 or $16 dollars an hour. I dont know what the final average pay cut might look like on every pay cheque. Do you?

"You" being Unionist. And to answer your question, he does know, and already told you: no wage cuts.

Fidel

By what I've read in news pieces posted by you and Unionist, this negotiation is contingent on GM not declaring chapter bankruptcy.

Unionist

Fidel wrote:

By what I've read in news pieces posted by you and Unionist, this negotiation is contingent on GM not declaring chapter bankruptcy.

Take a deep breath and start reading. From the start.

Fidel

[url=http://money.cnn.com/news/newsfeeds/articles/djf500/200905221400DOWJONES... reported yesterday[/url]

Quote:

While unions in the U.S. and Canada have tentative deals with the company, bondholders continue to hold out for better terms while the German government said the proposed sale of a majority stake in its European business needs to be resolved next week.

A group of U.S. lawmakers is also calling for fresh talks with GM bondholders, whose resistance to the proposed terms is viewed as the main barrier to a quick exit by the company from bankruptcy.

Ken Lewenza, president of the Canadian Auto Workers union, said in a media briefing Friday that GM is "very likely" to file for protection.

 

"Tentative" It's all in the English I guess. They'll be back at it next month squeezing workers for more.

KenS

Its not the English.

Its your tendency to read in what you want to see [for who knows what reason].

"Tentative" refers to the agreements with the CAW and the UAW. All agreements are tentative until the union members vote approval. "Tentaive" has nothing to do with the bondholders.

And the other things you highlighted referr to the uncertainty as to how things witll unfold for GM viz the bondholders. The agreements with the UAW and CAW stand regardless of how that shakes out.

And no, they won't be back to the workers next month for more.

Fidel

KenS wrote:

"You" being Unionist. And to answer your question, he does know, and already told you: no wage cuts.

But Unionist said in the previous thread:

Unionist wrote:
"So far, we have seen Layton praising workers' courage for taking wage cuts so that ..."
 , for which Unionist provided no quote from Jack Layton stating as much.

And Lewenza said that wages and pensions are secured and preserved. So why, in the next breath, are there reports of a $15-16/hr wage cut as reported in the Hamilton Spectator?

Former GM CEO Rick Wagoner took a big wage cut with being forced out and pensioned off at something like $23 million US.

So where is the $15-$16 dollar/hr hit coming from? It has to be realized somewhere?

[url=http://www.thespec.com/News/Business/article/570764]CAW digs deep for GM pact[/url] Wages slashed by another $15-$16/hour

Yes, it is confusing.

Unionist

Fidel, the savings are coming in some benefits (such as no more semi-private hospital room coverage, tuition susidies for workers' kids, discounts on auto purchases), less paid vacation time and other time off the job, work rule changes re productivity, freeze in pension improvements till 2015, wage freezes - I'm sure Ken or Tommy could likely give more details - but not what you or Layton said. It's severe, it's a huge retreat, but it is what it is, not what it is not.

Fidel

And I'm still not sure what you think Jack Layton said unless you misled us as to what you only believed he stated without a direct quote. In that case youre excused...again.

So, there are concessions in the form of reduced benefits amounting to a $15-$16 dollars an hour on top of the previous $7/hr equivalent wage cut. It all depends on where and how they wanted to take the hit. I'm glad we finally straightened out that bit of pro-corporate, pro old line party bafflegab on concessions made by our two old line parties and the CAW on behalf of Canadian workers.

Unionist

Fidel wrote:

I think when youre reduced to being a slavish apologist for the two old line parties, it's time to cash out. Objectivity is absent at that point.

At last, an issue where you speak with some knowledge.

 

Fidel

Ken said that you said there were no wage cuts period. That's all that he said you said, which was misleading.

Meanwhile the Japanese and German governments are bailing out car companies similarly but without the anti-worker agenda of demanding their unionized workers take equivalent "wage cuts" of $20 dollars/hr or more.

Keep on votin' Liberal and Tory, autoworkers. As cartoon character Pete Puma used to say to Bugs Bunny, "Gimme me a lotta lumps. A whooole lotta lumps! And on second thought, I'll just help myself" At which point he proceeded to thump himself on the head with a wooden mallet instead of waiting for Bugs Bunny to do it for him. Learned helplessness.

Unionist

Fidel wrote:

Ken said that you said there were no wage cuts period. That's all that he said you said, which was misleading.

There were no wage cuts. Period. Full stop. Goodbye.

 

Fidel

More mealy mouthed rhetoric from a supposed union activist. God help me if I ever become such a dedicated apologist for the old line party stranglehold on power in this country. Poor Canada.

Unionist

Fidel wrote:

More mealy mouthed rhetoric from a supposed union activist. God help me if I ever become such a dedicated apologist for the old line party stranglehold on power in this country. Poor Canada.

When you run out of arguments (that would be a few years ago), you resort to namecalling. The NDP and Jack Layton cherish support like mine, because it is given wholeheartedly and with full sincerity, along with the criticism that only friends can offer. Your brand is harmful and, I dare say, unappreciated by those who actually care for the future of the party.

Having said that, please go read up on this subject before continuing to embarrass yourself and everyone else here.

 

Fidel

And is it a done deal or no deal? I dont think either of you know.

KenS

Done deal.

If I was trying as hard as Fidel to prove some convoluted point, I'd probably be confused to.

But go for it if others have honest questions about how some of this works, or the power dynamics involved, what ever.

Fidel

Unionist wrote:
"Ummm, there was no wage cut."

There were concessions made on workers' compensation packages. So, yes, there were concessions made by the CAW in March and now this month. I think anyone would be confused by the misleading comments made above.

And thanks for finally spitting it out. It was a bit like pulling teeth.

 

 

Unionist

Fidel wrote:

Unionist wrote:
"Ummm, there was no wage cut."

There were concessions made on workers' compensation packages. So, yes, there were concessions made by the CAW in March and now this month. I think anyone would be confused by the misleading comments made above.

And thanks for finally spitting it out. It was a bit like pulling teeth.

 

 

If you bothered reading this thread, you would have noticed my post #22 above:

Unionist wrote:
Fidel, the savings are coming in some benefits (such as no more semi-private hospital room coverage, tuition susidies for workers' kids, discounts on auto purchases), less paid vacation time and other time off the job, work rule changes re productivity, freeze in pension improvements till 2015, wage freezes - I'm sure Ken or Tommy could likely give more details - but not what you or Layton said. It's severe, it's a huge retreat, but it is what it is, not what it is not.

Short-term memory or reading problem? Or do you get points for each time you fabricate something?

There were no wage cuts. And I didn't quote Layton in the last thread. And the person who did quote Layton provided a source - his January remarks to the Toronto Board of Trade. But I guess that comes under long-term memory, no?

 

Fidel

But in thread #1 of the same topic of dicussion, you were talking about Layton's alleged praise for workers accepting wage cuts, which was false and misleading.

And in everything you/KenS said prior to post# 21, there was no mention of concessions at all, which was also misleading.

So now youre saying there were concessions and nothing about what Jack Layton did not say then or now. This is progress. Carry on.

Unionist

Fidel: 6,289,914

KenS: 3

Unionist: 0

 

Unionist

[url=http://newswire.ca/en/releases/archive/May2009/25/c7455.html]CAW members ratify restructuring deal with GM[/url]

Quote:
CAW members working at General Motors in Oshawa, Windsor, St. Catharines and Woodstock, Ontario have voted overwhelmingly in favour of a new collective agreement, ratifying the deal by 86 per cent after a series of meetings were held over the past two days. [...]

The deal includes cost-saving provisions affecting cash compensation, health benefits, other non-wage benefits, work practices and productivity improvements as well as a comprehensive restructuring of the company's pension plan.

Fidel

[url=http://globalresearch.ca/index.php?context=va&aid=13703]On Obama's Chopping Block:[/url] It's The Turn of General Motors The greatest single attack on American workers since the Great Depression

Quote:
The alarm bells should be ringing day and night about what's being prepared at General Motors - the ripple effects could produce tidal waves.

The Obama administration has made no secret about its plans for GM: the Chrysler bankruptcy was the "test case," and now Obama's Wall Street buddies inside the Auto Task Force plan to replicate it.  The vast implications of the Chrysler bankruptcy went unnoticed by the mainstream media, concerned as it was with the convenient hype provided by Swine Flu. . .

 

Why was Chrysler so important?  Most significant was the fact that workers were scared into accepting large wage and benefit reductions. They were told by the U.A.W. "leaders" that, unless workers conceded to accepting the wages and benefits of non-union workers, bankruptcy would be unavoidable.  The workers conceded, and the very next day it was announced that the company was headed towards bankruptcy.  It is unimaginable that Gettlefinger and the other U.A.W. leaders did not know this was coming, since they spend considerable time back-slapping with Obama. 

This is but one of a long list of treacheries provided by a Gettlefinger-led U.A.W. and his obsession with making GM a better "global competitor."  Just as in 2007, autoworkers were scared into making drastic concessions to "save jobs," and soon thereafter jobs were slashed by the thousands.  . .

 

Also, GM will likely be split into two companies: one that will build cars with cheap labor for the world marketplace and the other consisting of factories and machinery that will be sold for scrap metal. Instead of this tremendous productive power being used to create a much more rational mass transit system, the company is downsizing itself, laying off thousands of workers and filling landfills.

 

Liberal fascism and weak labour unions go hand in glove.

 

KenS

Gee Fidel, you managed to find someone equally inclined to spouting off regardless of the easily available facts.

Quote:
Most significant was the fact that workers were scared into accepting large wage and benefit reductions. They were told by the U.A.W. "leaders" that, unless workers conceded to accepting the wages and benefits of non-union workers, bankruptcy would be unavoidable.  The workers conceded, and the very next day it was announced that [Chrysler] was headed towards bankruptcy.  It is unimaginable that Gettlefinger and the other U.A.W. leaders did not know this was coming, since they spend considerable time back-slapping with Obama.

Not only knew bankruptcy was most likely coming, but negotiated on the basis that it would. And, as with the CAW, the UAW membership was well aware of that.

abnormal

KenS wrote:
Not only knew bankruptcy was most likely coming, but negotiated on the basis that it would. And, as with the CAW, the UAW membership was well aware of that.

Regardless, bankruptcy is inevitable.  All this can possibly do is delay things a few months.

KenS

"bankruptcy is inevitable" means nothing. They are and have been planning it for a while now. "Restructuring" is what it is all about- its no more or less with or without actual bankruptcy.

 

So what exactly, or generaly, is 'inevitable'? And what is being flayed for a few months?

Unionist

[url=http://caw.ca/en/7491.htm]Here is the ratification brochure[/url] describing the CAW-GM agreement. It's hard (for me) to tell which of the concessions listed are "new", and which ones came from the two previous rounds (in March and last year, when they agreed to freeze wages for the next few years).

 

abnormal

It looks like the US end of the deal has fallen through - I don't know exactly what that's going to mean for Canada.

 

Quote:

Bondholders have rejected a debt exchange offer from General Motors that expired at midnight last night, the automaker said today, moving the company closer to a bankruptcy that could result in the U.S. and Canadian governments owning three-quarters of its stock.

The Obama administration is drafting a bankruptcy restructuring proposal that effectively would nationalize the border-straddling industrial colossus and put most of the rest of the company in the hands of a union trust fund.

 

etc ...

 

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/27/AR200905...

 

 

KenS

Are you referring to the US workers end of the deal- the UAW and GM?

Thats what they are talking about. The bondholders are on their owwn- isolated- and have nothing to do with the CAW or UAW agreements.

And even with them, nothing has 'fallen through'. The bondholders debt was going to be restructure one way or the other. If enough of them accepted the debt exchange offer, there was [probably] no need for bankruptcy. If they didn't, its bankruptcy. Their leverage was that bamkruptcy is disruptive, so they can aspire for a better offer so that GM doesn't have to go into bankruptcy. Failure to bring the bondholders in voluntarily has been expected for some time... the only thing to fall through was the unlikely last ditch attempts to stave that off.

I guess people persist in this idea that bankruptcy or not is some black and white thing. At least in this case, you need to think of bankruptcy as just one form that restructuring can take. "Restructuring" being a negotiation circus where the players jockey for getting less of a haircut. Chapter 11 bankruptcy is the default process if everyone does not voluntarily agree.... which is almost inevitable that not enough of the diverse bondholders will agree voluntarily.

abnormal

The question in bankruptcy is where the bondholders sit in the pecking order of security (i.e., who gets paid first).  I honestly don't know how senior GM's debt is but, on the assumption it's at the top of the pecking order, the bondholders will get paid first and what's left over will be available for running the company, pension funds and so forth.

KenS

Thats actually fundamentally wrong, even as a general statement.

And if you followed the news on the Chrysler and/or GM restructurings even occassionaly, one owuld know it definitely is not true in this case.

Bottom line [and general point]: the bankruptcy court decides who is going to get what in any bankruptcy... and the room for his/her judgement is all the greater in a Chapter 11. And in a Chapter 11 the debtor-in-possession [the one(s) providing post restructuring financing goes straight to the top of the list]. On top of that, the pecking order gets rearranged according to the needs of the business continuing to operate. And since if there are collective bargaining agreements, the reorganized entity needs to negotiate new contracts to continue operating, this means that in practice, workers and their pension and benefit funds are not just another creditor in the line. Since they are unsecured, if it depended on that they'd get pennies on the dollar. But they have leverage to at least move up past a lot even of the secured creditors as to negotiating clout for how much of a haircut they have to take.

All sorts of contracts- including collective bargianing agreements- are renegotiated before a Chapter 11 filing. Technically, they have no binding force. But since all the elements of the package depend on each other- including the vital debtor-in-possesion financing, all the contracts get honoured unless the secured debtholders can prove that they would have got more if a break-up liquidation would have gone through. And for that they have at best a very uphill battle. But some of them always try- for blackmail leverage if nothing else.

So all of that is true to at least some degree in any case.

And in these cases- the prospective debtor-in-possession just happens to be the US government. Which leaves little room for anyone to balk at their diktat. Both the UAW and CAW were subjected to it. But that had far more leverage- financial let alone political- than do the debt holders.

abnormal

Then please tell me why senior debt is cheaper than junior debt and so forth.

First tier secured debt holders have absolute priority in bankruptcy - that's why the various holders of Chrysler debt were able to hold up the process and that's why the pension funds are suing because the actions of the Administration are in violation of established bankruptcy law.

KenS

There is nothing you just said which is contradicted by my explanation.

People are stuck on what they hear about the very general overall ideal principle of bankruptcy, as if that applies equally to Chapter 11. Your first post was an example of that.

 

abnormal wrote:

The question in bankruptcy is where the bondholders sit in the pecking order of security (i.e., who gets paid first).  I honestly don't know how senior GM's debt is but, on the assumption it's at the top of the pecking order, the bondholders will get paid first and what's left over will be available for running the company, pension funds and so forth.

 In light of that explanation about Chapter 11 in general, and the auto companies in paricular: "what's left over will be available for running the company" is just dead wrong when it comes to Chapter 11. [And the business/legal logic is that even the most senior debt holders get pennies for the dollar if a company is liquidated, while a running company can pay back a higher portion of the debt.... and to do that, operating funds have to come before debt repayment.] On top of that "what's left over will be available for... pension funds" is wrong in practice. [The workers being part of the 'operating needs' as well as (very junior) debt holders.]

The rights of the first tier debt holders does give them the means to slow up the process. But they are fighting a very unlikely rear guard action. "Were" actually: the case of the pension fund Chrysler debt holder was rejected 2 days ago.

And obviously 'senior debt' is worth more than 'junior debt'... that isn't the point. You have fetishised the primacy of senior debt. As the process has unflolded we have seen how incredibly contingent that primacy is... and was predictably so before the restructuring process started. I said as much in forums here at least a couple months ago. Got the same persistent insistence then that the senior debt holders have all the cards, bit more surprising to hear it now.

KenS

Rabble column, with links to Alice Kelin previously pontificating on the subject.

http://rabble.ca/news/2009/06/auto-crisis-debate-new-thinking-stuck-old-...

Tommy_Paine

"Even in this solidaristic scheme, she hopes that workers use some of their time off the job to start their own businesses, “getting involved with entrepreneurial spirit.”

Well, if nothing else, maybe it's a way to get a government subsidized lunch (business entertainment exemption)  and get a car loan or lease deducted off the taxes (which someone-- golly gee, until recently autoworkers-- have made up for on their taxes)  and maybe get the government to hand out a portion of the gas purchased.

Oh, to be an independant business person who never took a hand out from the taxpayer!

Thing is, everyone looks to government when things go awry.  And, for nearly a century auto workers have done much more put than take.  The Alice Kliens of our economy have been afforded priveleged rules that hide-- to the extent that they can fool themselves into thinking they don't exist-- the amount they've been taking.

Like I said in another thread, if we don't want to do this kind of thing for autoworkers, then let's not do it for anyone.

Let's see whose non productive Ox ends up being gored then.