GM Workers Move Towards Pay for Performance

Business Execs Horrified, Feel They May Be Next

The Dismal Political Economist has already commented on what he believes the single greatest economic success story of the Obama Administration has been.  The success was the rescue of General Motors and Chrysler, which preserved a domestic auto industry, saved hundreds of thousands of jobs and is in the process of creating new jobs and a better economy for communities in which the auto industry reside.

GM and the UAW just finished wrapping up a contract.  The contract is radically different from labor agreements in the past.  Here is what some major provisions look like.

That’s right, the auto workers compromised in a manner that allows GM to re-open a plant in Tennessee.  But equally important are some reforms in the pay structure itself.

United Auto Workers union points to a future where workers trade the guarantee of gold-plated wages and benefits for job security and pay increases that are tied to the health of the company.

On Tuesday, the UAW detailed its tentative four-year labor agreement with GM that would give workers richer profit-sharing checks and return thousands of union jobs lost in recent years.

That’s right, no automatic cost of living wage increases for GM workers.  Instead they will get increases in compensation only if the company does well. 

Compare this to the bloated salaries and benefits that many company CEO’s get regardless of the performance of their business.  Of course for them such compensation is a right, an obligation of the shareholders to provide and the government not to tax.  They really do not want this “capitalism” thing, at least not for themselves.