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The UAW's 'record contract' hinges on pensions, battery plants

DETROIT - After nearly four weeks of disruptive strikes and hard bargaining, the United Auto Workers and the Detroit Three automakers have edged closer to a deal that could offer record-setting wage gains for nearly 150,000 U.S. workers. General Motors, Ford Motor and Chrysler parent Stellantis have all agreed to raise base wages by between 20% and 23% over a four-year deal, according to union and company statements. Ford and Stellantis have agreed to reinstate cost-of-living adjustments, or COLA. The companies have offered to boost pay for temporary workers and give them a faster path to full-time, full-wage status. All three have proposed slashing the time it takes a new hire to get to the top UAW pay rate. The progress in contract talks follows the first-ever simultaneous strike by the UAW against Detroit's Big Three automakers. The union began the strike on Sept. 15 in hopes of forcing a better deal from each major automaker. But coming close to a deal is not the same thing as reaching a deal. Big obstacles remain on at least two major UAW demands: restoring the retirement security provided by pre-2007 defined benefit pension plans, and covering present and future joint- venture electric vehicle battery plants under the union's master contracts with the automakers. On retirement, none of the automakers has agreed to restore pre-2007 defined-benefit pension plans for workers hired after 2007. Doing so could force the automakers to again burden their balance sheets with multibillion-dollar liabilities. GM and the former Chrysler unloaded most of those liabilities in their 2009 bankruptcies. The union and automakers have explored an approach to providing more income security by offering annuities as an investment option in their company-sponsored 401(k) savings plans, people familiar with the discussions said. Stellantis referred to an annuity option as part of a more generous 401(k) proposal on Sept. 22. Annuities or similar instruments could give UAW retirees assurance of fixed, predictable payouts less dependent on stock market ups and downs, experts said. Recent changes in federal law have removed obstacles to including annuities as a feature of corporate 401(k) plans, said Olivia Mitchell, a professor at the University of Pennsylvania Wharton School and an expert on pensions and retirement. "Retirees want a way to be assured they won't run out of money," Mitchell said.

GM’s move to Woodward is the right one — for the company and for Detroit

Back in 2018, Chevy invited me to attend the Detroit Auto Show on the company dime to get an early preview of the then-newly redesigned Silverado. The trip involved a stay at the Renaissance Center — just a quick People Mover ride from the show. IÂ’d been visiting Detroit in January for nearly a decade, and not once had I set foot inside General MotorsÂ’ glass-sided headquarters. I was intrigued, to say the least. Thinking back on my time in the buildings that GM will leave behind when it departs for the new Hudson's site on Woodward Avenue, two things struck me. For one, its hotel rooms are cold in January. Sure, itÂ’s glass towers designed in the 1960s and '70s; I calibrated my expectations accordingly. But when I could only barely see out of the place for all the ice forming on the inside of the glass, it drove home just how flawed this iconic structure is.  My second and more pertinent observation was that the RenCen doesnÂ’t really feel like itÂ’s in a city at all, much less one as populous as Detroit. The complex is effectively severed from its surroundings by swirling ribbons of both river and asphalt. To the west sits the Windsor tunnel entrance; to the east, parking lots for nearly as far as the eye can see. To its north is the massive Jefferson Avenue and to its south, the Detroit River. You get the sense that if Henry Ford II and his team of investors had gotten their way, the whole thing would have been built offshore with the swirling channel doubling as a moat. This isnÂ’t a building the draws the city in; itÂ’s one designed to keep it out. Frost on the inside of the RenCen hotel glass. Contrasted with the new Hudson's project GM intends to move into, a mixed-use anchor with residential, office, retail and entertainment offerings smack-dab in Detroit's most vibrant district, the RenCen is a symbol of an era when each office in DetroitÂ’s downtown was an island in a rising sea of dilapidation. Back then, those who fortified against the rapid erosion of DetroitÂ’s urban bedrock stood the best chance of surviving. This was the era that brought us ugly skyways and eventually the People Mover — anything to help suburban commuters keep their metaphorical feet dry. The RenCen offered — and still offers — virtually any necessity and plenty of nice-to-haves, all accessible without ever venturing outside, especially in the winter, but those enticements are geared to those who trek in from suburbia to toil in its hallways.

Buick to kill Verano as early as 2017

The Buick Verano's days are allegedly numbered. Citing unnamed sources, Automotive News is reporting that Buick will kill its Delta-platform-based sedan. The company offered the typical "no comment." According to AN, Buick is expecting 70 percent of its sales to come from the Encore, Envision, and Enclave once the Envision goes on sale. And it doesn't take a professor of economics to recognize that when half the vehicles you build account for just 30 percent of the sales, it's time to trim. But the case for killing the Verano is a weird one, because the problem isn't a lack of demand. Struggling sales might be the reason to kill a car, but the Verano is – and has consistently been – Buick's second best-selling sedan. It's beaten the slightly larger, more expensive Regal by at least 12,000 units in each of the last four years. Hell, in 2013, Buick sold 45,000 Veranos to fewer than 19,000 Regals. So why not kill the Regal? Well, the Verano's raison d'etre is irrelevant today. Buick launched its smallest sedan at a time when premium compact four-doors weren't a thing and gas prices were high enough that consumers were still hesitant to tie themselves to a CUV's fuel bill. And while it was roughly the same size as the Chevrolet Cruze that it shared GM's Delta platform with, it had enough unique equipment to stand apart and warrant its price premium. Today, fuel prices are cheap and consumers are flocking to crossovers while Buick is stuck sharing the premium compact pie with much more prestigious names ( Mercedes-Benz and Audi). And because it's sharing showroom space with the super-popular Encore, even the Verano's affordable pricing has become a liability. Today, a lightly equipped Verano is the same price as a base Encore, and they offer broadly similar features (rear-view cameras, a seven-inch touchscreen with Intellilink, Bluetooth, etc.). And if the Encore is too small, there's probably a GMC Terrain sitting in the same showroom, offering more utility and equal equipment to the Verano for a similar price. As one dealer told AN, "For not much more money, customers can get an SUV." Killing the Verano might risk 30,000 to 40,000 sales, but it's a move that proves Buick has tremendous confidence in its CUV lineup – clearly the company thinks the Encore can do the job of luring customers into showrooms. AN's sources claim the Verano will survive through 2017, so we'll be waiting a few years to find out if that faith is misplaced. Related Video: