GM’s Smith Sees Turning Point in Relations With UAW

A contract being considered by General Motors Corp.’s 335,000 United Auto Workers union members represents a turning point in labor-management relations and a move toward closer cooperation, GM Chairman Roger B. Smith said Tuesday.

“This contract is basically a recognition by both sides that we had a job to do in getting cost competitive and quality competitive worldwide,” Smith told reporters before delivering a speech to the Economic Club of Chicago.

“In the years to come, we’ll look back on this contract as a big turning point in our relationship with our employees.”

The three-year contract, approved Thursday by GM without a strike deadline, is nearly identical to a Ford Motor Co. contract ratified Sept. 30. The union’s executive board and a 300-worker bargaining council approved the agreement Monday.

The GM agreement prevents layoffs for most reasons except cuts in production volume because of slow sales. It also requires the company to recall or hire one worker for every two who leave the payroll and increases base wages by 3% in the first year.

Smith refused to discuss details of the contract, but he praised the “harmonious” spirit of negotiations between the union and management as a step toward achieving “world-class competitiveness.”

Smith said the union’s rank and file is expected to ratify the contract by the Oct. 25 deadline.

In his prepared speech to business leaders, Smith accused American business of valuing security over risk.

“When you make changes, you draw criticism, but you can’t let that stop you from seeking and taking risks,” he said.

“I’m convinced that if we don’t continue to take risks, then we’ll actually destroy our past successes, and the new risk-takers of the world will pass us by.”