DETROIT - Thousands of UAW-GM workers could soon be asking themselves a simple question: Is it time for me to retire?
If union members ratify a contract at General Motors next week, generous incentives - including a $60,000 bonus for some - could soon be in place to encourage many hourly workers to retire by the end of February.
The strike at GM - which continues through ratification votes next week - has had 46,000 UAW workers off their jobs at 55 GM facilities in 10 states since Sept. 16.
According to the UAW contract summary for GM hourly workers, terms include:
- A $60,000 retirement bonus for up to 2,000 eligible production and 60 eligible skilled employees who retire between Dec. 31 and Feb. 28, 2020.
- Retirement-eligible employees at three GM plants that are closing - including Warren Transmission in Macomb County - will be offered $75,000 for production workers and $85,000 for skilled workers if they exercise their right to retire.
Other special incentives are included for union members who worked at Warren Transmission, the Lordstown Assembly Plant in Ohio, and Baltimore Transmission in Maryland.
A long list of potential retirement incentives, buyouts and training assistance for UAW members from Warren, Lordstown and Baltimore is outlined in the package.
The deal includes a "member assistance package" specifically addressing the facilities that will officially close under the agreement. The UAW noted that a "big focus of the 2019 contract negotiations was GM's abrupt announcement last November" regarding potential plant closings.
The plant closing incentives would apply to those employees who were active on Nov. 28, 2018, and are working at another GM facility or those who remain in a specified status after they declined a placement offer at another GM facility, known as "L34" status.
If someone at a closed plant doesn't have the 30 years of service to get to a full retirement, for example, the deal would offer extra incentives for those with 28 years or 29 years.
Those deals apply to those who are able to "grow-in to retirement."
For example, employees who had 28 years of service but less than 29 years as of Sept. 14 would be eligible for payments of $3,000 a month if they agree to retire at 30 years of service.
Employees "growing-in to retirement" would be placed on leave while receiving those payments. In addition, they would continue to receive health care benefits until commencing retirement at 30 years of service.
If ratified next week, the contract also would provide buyout money for those who aren't eligible to retire but will agree to terminate their employment and benefits (other than vested pension benefits).
For example, GM hourly employees at the closing plants - Warren, Lordstown and Baltimore - with 10 years to 20 years of service would receive a buyout offer of $67,500.
About 600 UAW members from Lordstown alone would be impacted by the special retirement incentives, according to Michael Aurillo, recording secretary for UAW Local 1112.
According to GM, many workers from the closed facilities have transferred to other GM locations and would be eligible for the various retirement options and buyout incentives.
Lordstown saw 1,381 of its hourly UAW employees - or most of its workers - transfer to other GM facilities, according to GM spokesman Daniel Flores. For example, 326 Lordstown workers transferred to the GM plant in Bowling Green, Kentucky.
Warren Transmission saw 190 workers transfer to other GM plants. Baltimore Transmission saw 156 workers transfer elsewhere, he said on Friday.
GM said it had already placed more than 2,300 employees - out of 2,800 impacted at the four "unallocated plants" - to other GM locations.
The GM Detroit-Hamtramck Assembly Plant - named as an unallocated plant in November 2018 - will remain open to produce an electric pickup.
As with any early retirement or buyout offer, of course, one wants to review all the options. What do any of these offers mean to your health care coverage? Would you have left GM anyway? Had you been thinking about retiring soon?
For some workers transferred to other locations, it's clear they'd have to consider how long they're willing to drive to a GM plant in Flint or Toledo if they live in Warren or Southfield. Or if they moved, do they want to move back to their hometown?
The agreement states that employees who had accepted transfer offers would not be required to pay back any relocation allowances that they had received should they now choose to retire, grow into retirement or take a buyout. Relocation assistance was based on distance.
Other key questions to ask: Do you have a spouse with health issues? Do you have kids in college? Do you have a solid lead on another job? A family's individual situation needs to be carefully considered beyond the big dollar signs.
GM had voluntary buyout offers in the table for salaried workers in November 2018 where nearly 18,000 salaried workers were eligible.
As for current UAW retirees, the UAW-GM agreement includes some benefits, too. The legal service plan trust was funded for the life of the purposed 2019 agreement and extended to spouses of current UAW-GM retirees as well as UAW Delphi retirees, spouses and surviving spouses. Legal assistance also was added for non-moving violation traffic matters, Social Security issues and Medicare and Medicaid guidance.
If the contract is approved, the deal has a record $11,000 ratification bonus - and $4,500 for temporary workers. In addition, a 4% lump sum wage bonus also would be paid out in the first year for permanent manufacturing employees.
Current retirees do not get a ratification or additional bonus.
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