Laid-Off GM Workers Would Get 3 Years’ Pay : Van Nuys: Victims of plant shutdown overwhelmingly approve union contract. National UAW vote still pending, but the contract is expected to pass.
What’s bad for General Motors is good for about 1,200 blue-collar workers who lost their jobs when the automotive giant closed its plant here in August, 1992.
On Sunday, the laid-off Van Nuys workers overwhelmingly approved a new three-year union contract that allows them to keep receiving a paycheck and health benefits from the automaker for three more years. The GM Van Nuys workers, represented by United Auto Workers Local 645, voted 557 to 2 in favor of the contract.
Negotiators for GM and the UAW international union, which represents about 265,000 workers at GM, hammered out a three-year agreement last week that most analysts said favors the union. Other UAW locals across the country will vote on the contract in the next two weeks. The national agreement, which was endorsed by about 400 national leaders of the UAW, is expected to be ratified by the rank and file.
The new contract includes generous benefits for the laid-off Van Nuys workers and those at three other GM plants that have either closed or are scheduled to be shut down.
The new contract includes:
* Close to full pay and health benefits through Sept. 14, 1996.
* Workers have the right to turn down a job offer at another GM plant without being penalized. If a worker does turn down a GM job, the worker stops receiving a GM paycheck, and instead gets paid through a complicated mix of state unemployment and GM supplemental benefits that amount to 85% to 100% of a worker’s gross pay.
In order to continue funding the supplemental pay program, GM agreed to set aside $580 million for laid-off workers.
* GM is also attempting to lure as many workers as possible into retirement by offering them a $15,000 voucher good toward the purchase of a new GM car, plus $6,000 cash to pay for the car’s taxes, license and registration fees.
* Each laid-off worker, regardless of age, can give up his or her health insurance, which is paid by GM, in exchange for $60,000 cash. This is an attractive feature for workers whose spouses work and have separate health coverage for the family.
In addition, workers at the Van Nuys facility and three other GM plants can choose from two generous retirement plans. The first allows a retiree to collect a full pension and work full-time at another job outside GM without being penalized. Under this plan, GM would give the retiree a $10,000 voucher toward purchase of a new GM car or truck, plus $4,000 for the taxes and fees.
Under the second plan, GM agrees to give a retired worker a car-purchase voucher if the retiree agrees that he will not earn more than $15,500 per year at another job.
Dozens of workers who were eligible for the early retirement plan offered by GM when the Van Nuys plant closed instead chose to receive unemployment pay, hoping that the union would negotiate an increase in pension benefits in the next contract.
Sal Garza, 52, and Pete Placencia, 59, are typical of these older workers. They each worked at the plant for 35 years. Their hopes for a bigger pension were realized in the new contract negotiated by UAW officials.
“I could’ve retired after 30 years, but I chose to collect unemployment and hang on until the new contract was negotiated. I definitely plan to retire now. We’ve got some real good retirement benefits now. I expect to get about $2,000 a month,” Placencia said.
Garza, a former forklift mechanic, was injured in a plant accident in 1988 and has been receiving disability payments since. But Garza said he will now apply for retirement.
“I would be foolish not to retire now that our pension has been improved,” he said.
When the Van Nuys plant closed, Local 645 represented about 2,600 workers there. About 600 retired, while another 300 accepted employment at GM parts plants in 10 states, including a plant in Santa Fe Springs that now employs about 10 former Van Nuys workers among its 200 workers.
Union officials said that about 500 laid-off Van Nuys workers have either moved or taken jobs with other companies.
The pact negotiated with the UAW is an expensive one for GM. The slew of early retirements sure to be triggered by the new contract is expected to increase GM’s underfunded pension liability to about $25 billion, from $19 billion currently.
“It’s not a free ride, but compared to people living on the street, we’re doing OK,” said Dennis Dalrymple, an electrician at the Van Nuys plant for 20 years. Dalrymple has not found a job and is enrolled in film classes at UCLA.
General Motors, which has been plagued by inefficiency and poor management, last Thursday announced a $113-million loss for the third quarter. Three days earlier, GM had announced that it was taking a $950-million charge against quarterly earnings to pay for plant closings and benefits for laid-off workers.
In the last three years, GM’s North American operations have lost $17 billion. The company’s share of the North American marked dipped to 31.2% in the quarter, but it is still the world’s largest automaker.
Workers at Van Nuys earned about $17.50 per hour on average, and many are still bitter over what they said was GM’s reneging on a promise to keep the plant open. GM officials have consistently denied making such a promise. Nonetheless, Local 645 members in Van Nuys said that GM’s agreement to continue paying them for three more years, even though they are not working, is the least the company could do for them.
“Before they shut us down, we did everything GM wanted in order to save our jobs. They reassured us on a Friday that they were going to keep us open, and then on Monday announced they were going to close the plant,” said Ray Knudson, a retiree and Local 645 trustee.
“People are still very angry with GM. They led us to believe that we were going to build a new model and keep us open. That raised everyone’s hopes,” said Mark Masaoka, a former electrician at the plant.
The Van Nuys facility built about 6.3 million vehicles during its 45 years of operation. When it closed, the plant was producing Chevrolet Camaros and Pontiac Firebirds.
According to Knudson, the newest workers at the Van Nuys plant had about 12 years seniority when the facility was closed. Workers with 30 and 35 years of service were not uncommon.
Local laid-off workers said they are satisfied with the new contract.
“If it were not for the union watching out for our interest, GM would’ve thrown us out on the street years ago without as much as a thank you,” said Dalrymple.
