UAW Seeking $10K Signing Bonus for Each of its 113K Workers

The United Auto Workers union, currently bargaining a new contract with U.S. automakers, is seeking a signing bonus three times higher than that which workers received for endorsing the current accord. In exchange for not increasing fixed labor costs at General Motors (NYSE:GM), Ford (NYSE:F), and Chrysler Group LLC, the UAW is seeking a signing bonus between $8,000 and  $10,000 for each member.

The union’s contracts, set to expire September 14, cover 113,000 auto workers at GM, Ford, and Chrysler. The union is looking to a sizable signing bonus as a means of repaying workers for concessions they made, including pay cuts, in order to help the U.S. automakers survive the financial crisis and recession.

UAW President Bob King has said he’s open to lump sum payments tied to profit sharing and productivity, but automakers might be resistant to such a large lump-sum payout. A $10,000 signing bonus for each worker would cost GM $470 million, Ford $410 million, and Chrysler $250 million.

In 2007, when workers for GM, Ford, and Chrysler ratified the current contract, they received signing bonuses of $3,000. Before that, signing bonuses had been around $1,000. “The signing bonus is relatively new,” said Harley Shaiken, a labor professor at the University of California at Berkeley. “It’s meant to be a statement of good faith and to offer an incentive” to ratify a contract.

However, Michele Martin, a spokeswoman for the UAW, denied that the union was seeking such large bonuses, while Marcey Evans, a Ford spokeswoman, declined to comment. Representatives from GM and Chrysler also declined to comment.

The UAW’s King spoke on August 29 at the Detroit Economic Club, saying that he would not raise fixed labor costs for the U.S. automakers. “We are going to make sure the companies are competitive coming out of these agreements,” said King. “We are not going to disadvantage the companies we work with. Heck, we all want a wage increase, but is that the best way?”

However, King also said that the workers must still be rewarded for the $7,000 to $30,000 in concessions each has given since 2005 in order to keep the industry afloat. Workers forfeited raises, bonuses, cost-of-living adjustments and a two-tier wage system in which senior employees were paid about twice the salary of new hires, all in order to keep Michigan’s single-most important industry alive.

And now that GM and Ford are profitable again, workers want back what they gave up. Ford workers already signed an “equity of sacrifice” grievance against the automaker back in June, which will enter into an arbitration hearing on September 15, one day after their contracts expire.

GM takes the lead in negotiations with the UAW, and it is there that the size of the signing bonus will be determined. While talks at Ford are scheduled only for tomorrow, talks at GM and Chrysler, in which Fiat SpA (PINK: FIATY) now has a majority stake, will continue through the weekend.