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UAW and GM strike a deal. Is that good news for Ford and Chrysler, too?

If the past is any indicator, the labor deal struck between the UAW and GM could be a template for Detroit's other automakers. The deal includes investment in six plants and 6,400 new jobs.

By Staff writer / September 21, 2011

General Motors Chairman and CEO Dan Akerson (L) addresses the audience as United Auto Workers Union President Bob King (R) during opening ceremonies of the GM-UAW Contract Negotiations on the factory floor of the Detroit-Hamtramck assembly plant in Hamtramck, Mich., in July.

Rebecca Cook/Reuters/Files



General Motors and the United Auto Workers union announced a tentative agreement late Tuesday that will create more than 6,000 new jobs and raise hourly pay for entry-level workers.

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Many times in Detroit the first deal struck between the union and an automaker will signal what is to come for the remaining two. It's yet to be seen how Ford and Chrysler will fare.

The highlight of the GM agreement is the company’s pledge to invest in six plants in Tennessee, Michigan, and Indiana, which the union says will collectively create 6,400 US jobs, many of which were previously lost to satellite plants in Mexico.

The company will restart a shuttered Saturn plant in Spring Hill, Tenn., where it will build one midsize car and launch a second new model midsize car by late 2013. The plant closed in 2009 following the GM bankruptcy and subsequent restructuring that retired the Saturn brand.

Tennessee Sen. Bob Corker (R) called the news of the plant’s reopening “outstanding," and dubbed Tennessee an "automobile mecca.”

The union was not able to eliminate the controversial two-tier worker structure that splits the pay scale between entry-level and tenured workers, nor did it secure cost-of-living increases or base pay raises. However, it did raise the maximum hourly entry-level workers can earn, to $19.28 by 2015.

GM also agreed to a $5,000 signing bonus plus enhancements in profit sharing, which will now guarantee workers a minimum of $3,500 each year.

Local union leaders across the US voted unanimously to recommend the deal. Rank and file membership votes next week.

In speaking to reporters Tuesday, UAW President Bob King lauded the deal, saying it will boost “communities in desperate need of work, and brings production back to the United States.”

However, he would not say whether Ford or Chrysler was next in line at the negotiating table.


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