General Motors will outline its long-term viability plan to Congress on Tuesday, with that plan likely to contain more than $1 billion in annual labor savings. Although the details of the plan won’t be known until tomorrow, most of the cost cuts will come from further plant closings and changes to factory work rules.
GM and the UAW will continue negotiations well into tonight, but both sides are expected to agree on further plant closings. However, in order to help ensure UAW ratification, factories earmarked for closure will remain unidentified.
In addition to more plant closures, GM and the UAW are eying further labor cost cuts. Although GM’s 2007 landmark contract with the UAW included wage cuts, the latest cuts will focus savings from factory work rules, leaving UAW pay unchanged.
For example, a current UAW provision requires an equal number of skilled trades members to be on site during repairs or construction as outside contractors, which costs GM extra money for no real reason. GM is also looking to cut costs in several other areas, such as employee break time.
“These things can take a lot of costs out without ever hitting worker wages,” an inside source told Automotive News.
Full details of the plan are expected to be made public sometime tomorrow.
