UAW contract to save $1,000 per car, benefit the Big Three in different ways
11/23/2007, 1:45 PM
By Drew Johnson
When the provisions of the recently inked deal between the UAW and General Motors, Ford and Chrysler go into effect in 2010, it will save the automakers an estimated $1,000 per car. At that level, if U.S. car sales remain above 16 million units per year and the Big Three retain their current market share, it would mean savings of $3.8 billion for GM, $2.4 billion for Ford and $2.0 billion for Chrysler.
According to Automotive News — who also tallied the savings per company — the new contract should benefit all three companies equally, but in different ways.
GM
Since GM has the highest number of retirees, the UAW run health care fund will benefit it the most. Morgan Stanley predicts that the new setup will generate an extra $1 billion in cash flow for GM, with Ford only seeing an additional $300 million. Chrysler will see even less, due to its lower number of retirees.
Ford
Ford is poised to benefit the most from the new two-tiered wage system. According to Automotive News, the new UAW contract allows to the automaker to replace up to 20% of its 50,000 hourly UAW workers with lower paid employees. The new contact also lets Ford pay new production workers — not just non-production workers — at the lower wage rate.
The UAW also gave Ford more power to require laid-off workers to accept jobs at other factories or to leave the company — a move that will save Ford money by not paying employees to do nothing.
Overall, the two-tiered wage system could save Ford as much as $2 billion. In contrast, the same system will only save GM about $700 million.
Chrysler
While Chrysler won’t benefit financially equal to GM and Ford, the automaker is set to gain from its lack of future product promises. By not guaranteeing future models or even production facilities, it gives Chrysler the flexibility to produce the vehicles it sees fit for the market and allows for inventory control in order to sustain its North American turnaround. Chrysler announced the production end of several models last month, with further cutbacks likely.
But even with the concessions given by the UAW, domestic automakers are not guaranteed a North American turnaround. “The industry is still in a pickle,” said Dave Cole, chairman of the Center for Automotive Research.



11/23, 2:23 PM
posted by:
67_L-88
I suppose this is a start.
11/23, 2:24 PM
posted by:
jackjimturkey
Just Found My Enclave in Santa barbara.
Whoo-hoo!.
Gotta wait ’til Lunchtime and call them befor I drive 3+ hours to get it!
Yeah!
11/23, 2:40 PM
posted by:
RicardoHead
Good luck JJT!!! Congrats!
11/23, 2:42 PM
posted by:
CTS DRIVER
oh hell yeah, major congrats on that jack.
11/23, 2:46 PM
posted by:
RicardoHead
Too bad it isn’t spring, JJT. If it were, the inter-sorority volleyball tournament might be going on over there by UCSB. We used to skip class and watch the real show on the beach there.
11/23, 2:51 PM
posted by:
jackjimturkey
My alma mater has the best-looking collection of Coeds in the nation.
11/23, 3:08 PM
posted by:
RicardoHead
My undergrad was awesome, also, JJT. But grad school was a different story – we used to joke that our grad school was “where the women are few and the horses are scared.”
11/23, 3:36 PM
posted by:
BLISS
good
11/23, 4:08 PM
posted by:
Commodore
This is a start. I guess that shrinks the unfair competitive advantage that imports have from about $2000-$2500 to just over a $1000 something. And if the dollar keeps sinking and/or Asian currencies rise, that would shrink Toyonda’s money advantage even more. Good news
And congratulations JJT!!
11/23, 4:17 PM
posted by:
Bryce
jackjimturkey, I’m showing that Hughes Buick in Santa Barbara has one, a Platinum Metallic. Did you decide to go with a different color?
11/23, 4:46 PM
posted by:
RicardoHead
Commodore – not necessarily. About half the Japanese cars are built here stateside mostly sourced in dollars. On top of that many made in Japan/Korea cars source components from the USA so the dollar drop benefits them.
Was reading some stats earlier. USA auto component imports are down 8% in the past year, and component exports are up 10% or so. Was also surprised to see that, including components, the USA is now a net auto exporter to Canada now. It’s a trip to see how quickly business can react to the changes, but that’s the natural flow of things in relatively free markets. Given that Opels are slated to be built here now, the ratios with Europe might change up a bit soon too.
11/23, 5:36 PM
posted by:
Commodore
Sure, increasingly imports have opened factories here (mostly to make themselves seem less “foreign”) but remember that these factories are operated by non-union workers. No matter where they go, imports have an advantage because whether they build their cars in Japan and export them here cheaply or build them here without union labor (or build them in overpopulated countries like India and China where labor is near free) they always have a monetary advantage. That won’t stop unless the Asians stop playing with their currencies or the unions get off the Big 3’s backs.
11/23, 5:45 PM
posted by:
LP640
has LLN run out of news to report?????????
11/23, 7:47 PM
posted by:
jackjimturkey
Bryce: I’m still awaiting word from them. Buick.com said they had 2, the other being my preferred 7-seat glue-gold CXL. Maybe I’ll just settle for a caramel-colored one. I just don’t want a bland greyish brown like my tempo and cavalier or toyota, or a dull white like my civic or mazda. I want a distictive color this time around, damnit!
11/23, 8:03 PM
posted by:
RicardoHead
Caramel looks damn good, JJT. You can’t go wrong with either. I’m stoked for you!
11/23, 8:33 PM
posted by:
johnnycanuck
‘ Oh lord, won’t you buy me a Mercedes Benz. My friends all drive Enclaves, but they wear Depends…’
11/23, 8:53 PM
posted by:
1c3d0g
Exactly. This is a start. I’m glad the UAW decided to look past its greedy intentions and negotiated a better deal for the Big 3.
11/23, 8:54 PM
posted by:
jayjc08
I’m supposing Chrysler’s going to go for lower production than Ford or GM. That may turn out to be interesting…
Commodore- Yes, but even the union now threatens Toyota
JJT- Very nice, probably the best SUV currently out there for the buck. Hope everything goes well. Personally, I’d go for the gold CXL, I know what you mean about colors (my Taurus, being the blandest vehicle out there… just plain old gray and white, but gets the job done better than anything out there).
11/23, 9:27 PM
posted by:
TOZO
“lack of future promises” – kudos to Cerberus for screwing the union. One of the (original) big 3 had to. Freedom in the future beats measly savings.
And kudos to JJT for the purchase!
11/23, 9:38 PM
posted by:
Veda
Volleyball tournament? I’m an UCSB alumni and there’s nothing like the banned Isla Vista halloween party. It’s basically an every year riot!
11/23, 11:56 PM
posted by:
CA36GTP
I’d rather the UAW was crushed and dismembered, but I’ll take this as a start.
11/23, 11:59 PM
posted by:
Impulsive
Congrats, ‘jjt’ … nice choice.
11/24, 8:47 AM
posted by:
richt62167
Congrats Jackjimturkey!!!
I know what you mean. I just picked up my 08 CTS (crystal red) last night after work.
11/24, 9:13 AM
posted by:
autonut
You are idiots! With all the posting about coeds playing volleyball, my man JJT probably drove his Buick into a tree already staring at young poong. Monday we’ll read obituary.
11/24, 10:16 AM
posted by:
RicardoHead
Ok Deanster. “CONGRATULATIONS YOU ****KNOCKING BALLJUGGLER!”
11/24, 10:19 AM
posted by:
DeansterTJ
Thanks! LMFAO!!!
11/24, 10:20 AM
posted by:
DeansterTJ
And Richt62167, congrats on the CTS!!!!
Congrats JJT!
11/24, 10:25 AM
posted by:
RicardoHead
Oh yes, and to keep this on topic, the fastest time I ever made the 280 mile run from UCSB to San Diego was 3 hours, 18 minutes.
JJT, be careful with those trees. It’s one thing to ram your branch thru a coed, and quite another to get a branch rammed thru you. Just ask Deanster.
A week ago Deanster wrote:
…….”I’d rather **** myself in the ass with a branch than buy this…” (about a Tiguan)
so now that we know Deanster didn’t buy a Tiguan, then he clearly has ****ed himself in the ass with a branch. And he owes us the video.
11/24, 11:43 AM
posted by:
DeansterTJ
Why don’t you come over and I’ll give you a demonstration, live?
11/24, 12:27 PM
posted by:
RicardoHead
You’ll **** yourself in the ass with a branch live?
11/24, 2:30 PM
posted by:
Veda
RicardoHead, that’s about right. After graduating I moved from SB to SD and had to do roundtrips moving my stuff. My best time was 3 hours 5 minutes, of course this was before I got my 6 speeding tickets.
11/24, 3:24 PM
posted by:
Impulsive
This thread has made me laugh out loud, literally. Loving it.
Deanster, congrats on the Sahara … as for the branch thing …
11/24, 4:45 PM
posted by:
Pauly
I understand that there needs to be some major negotiations with the UAW, but who will the Detroit 3 blame for all their problems when there are no union members left?
11/24, 5:24 PM
posted by:
RicardoHead
I think I’ll go down to Tijuana and see if they now have “Deanster’s Branch Show”
next to “Juanita’s Demostración del Burro”
Here’s a pic of me in TJ!
http://www.fugly.com/media/IMAGES/Dumb/Donkey_Show.jpg
11/24, 5:32 PM
posted by:
autonutt
Awwww.. Dick.. looks like you finally found someone who appreciates your RicardoHead!!
11/24, 6:07 PM
posted by:
jackjimturkey
Good deal,deantj.
don’t go congratulating me yet. Bastards already sold the Blue-gold.
I’m probably the only Olds-to-buick driver not ready for depends.One of my co-workers was in an Acadia, and he said what I already know: the lambdas rule!
11/24, 6:42 PM
posted by:
johnnycanuck
I gotta ask JJT, but does Detroit still do factory orders?
11/25, 12:15 AM
posted by:
Classic-auto
Well it seems everyone is getting cool new cars around here. I just got a new old car to build and add it to my Muscle Car collection. It is a 1969 Dodge Charger. I was out town when i saw a blue car sticking out behind a house and when i checked it out there it was a 1969 Charger. I nocked on the door of the house some stupid teen came to the door and next thing i knew he was sining the papers of the Charger to me. I bought it for $2000. It has no motor or tranny and one side of the car has no rocker panal, but sine i got it i bought a crate 383 with a old 4 speed tranny i had in the back yard. I think it will be 6 months before i finish rebuilding the car but it will be sweet.
11/25, 10:10 AM
posted by:
autonut
Deanster congrats with new ride and hopefully same to jjt. Don’t get tickets and may you never need to see the dealer.
Deanster don;t use tree limbs, come to see my doc. Every time I get physical it is the thick finger violating me checking for enlarged prostate. You are welcome to join. I am ready for colonoscopy without general anesthesia by now.
11/26, 2:43 AM
posted by:
C6Racer
Did I miss something? Is everyone all of a sudden buying new GM cars(one one Chrysler)? Never thought I’d see the day. Even 1115 isn’t posting.
I guess I’ll add to the excitement by saying this: with my near perfect credit I’m lookin forward to buying the new Solstice GXP I’ve always wanted within the next 1.5 years.
“a move that will save Ford money by not paying employees to do nothing.”- couldn’t have said it better myself.
11/26, 2:45 AM
posted by:
C6Racer
BTW, good luck with your car Classic-auto! I’m working on a car myself. A 1974 Pontiac Luxury LeMans. I see a blown Pontiac 400ci in it’s future.
11/26, 9:05 AM
posted by:
DeansterTJ
C6 – Wranglers are good bang for the buck, and never more so with this current generation. But let’s be honest, if I had $150,000 kicking around it would be an S550.
11/26, 1:47 PM
posted by:
jackjimturkey
johnnyc: I don’t think so, The dealers wouldn’t like it. We should be buying cars online.
11/26, 3:00 PM
posted by:
johnnycanuck
Well good luck on the Enclave, JJT. I see in today’s LLN they’re selling well which obviously explains why you can’t find the one you want.
11/26, 4:28 PM
posted by:
C6Racer
grammar check: (and one Chrysler)