Today's copy of The Wall Street Journal had an interesting article found on page B3 called "GM: Contract Protects Us." The summary is below.
Dan Akerson (GM CEO) claims that with the new labor contract with the United Auto Workers union (UAW) GM will maintain profitable in North America even if U.S. auto sales sink to lows seen during the height of the economic meltdown in 2008. Essentially the deal raises the pay for GM's lowest paid factory workers, however it will be making its labor costs more variable and linking them to profitability and quality of the company. Also, the plan will open up the Spring Hill, Tennessee factory and thus creating up to 6,400 new jobs. Under this new deal, factory workers would receive a combination of one time payment and profit sharing pay that would range from $12,500-25,000 over the life of the contract. The UAW is still in talks with Ford Motor Co. and Chrysler Group LLC.
In other news Japan's auto maker Toyota reported its first increase in monthly sales since the earthquake and tsunami in March. However all is not well with Japanese auto makers. Nissan Motor Co. and Honda Motor Co. reported 17% and 2.5% drops in domestic output in August respectively, compared to last year of the same time.