GM may ask for (and get) pay-for-performance clause in UAW contract

Aug 5, 2011

A top GM executive said Thursday that the automaker wants to peg United Auto workers' pay to their job performance. Workers who turn out quality vehicles would benefit financially.

"We want to pay for the performance," GM North American President Mark Reuss told reporters at an industry conference.   “All of those things that I get measured on, I want everybody else measured on, too.”

That would be a big change at GM, where the current UAW contract expires Sept. 14.

In the UAW’s not-so-distant past, it might have been considered sacrilege to consider linking a worker’s pay increases to factors like attendance -- or reducing the number of cars that have to be sent back for repairs. 

But this isn’t your father’s UAW.  It’s Bob King’s.  The union President doesn’t dispute that high fixed labor costs contributed to GM’s bankruptcy.

“So we’ve got to be smart and creative to find ways to increase income without creating a competitive disadvantage," King told reporters at the same industry conference.  "It would be really shooting ourselves in the foot.”

If pay for performance ends up in the contract, King could have a hard sell to the rank and file.  There’s plenty who want their leadership to get back what they once had.  In the past, that usually meant guaranteed hourly wage increases.  

Pay for performance will likely be on the negotiating tables at Chrysler and Ford as well.