DETROIT -- A new four-year contract brokered between the United Auto Workers and General Motors Co. will add or keep 6,400 jobs in the U.S. but will keep GM's costs in check by offering buyouts to longtime workers and replacing them with lower-wage hires.
Most workers won't get annual pay raises, but will get at least $12,500 in bonuses, profit-sharing and other payments over the life of the contract. GM is offering some older workers up to $65,000 if they retire or leave early.
Union leaders from around the country were briefed on the deal in Detroit in a morning meeting, and they voted to recommend that GM's 48,500 factory workers ratify it. Workers are expected to finish voting on the deal by Sept. 29.
The deal creates more than 5,100 new assembly-line jobs and opens up 1,300 jobs for skilled workers like electricians and welders. The skilled work is now done by outside contractors, but UAW workers will be able to bid on it. The union said much of the work is being brought back from Mexico.
"The auto industry is back. General Motors and the UAW are working together to create jobs in America," UAW President Bob King said at a meeting of local union leaders in Detroit.
GM has agreed to invest $2.5 billion in its factories, including the reopening of an assembly plant in Spring Hill, Tenn. Union-company teams also are identifying 760 more potential jobs and 1,400 more jobs for UAW-represented GM suppliers.
The agreement reached Friday includes a $5,000 signing bonus. Workers will get a minimum of $3,500 in profit-sharing next year and $250 per year for meeting quality targets. They'll also get three $1,000 bonuses.
The contract includes a new profit-sharing formula that is based on the company's North American profits. If GM earns less than $1.25 billion, workers won't get any payment. In 2010, GM earned just under $5.7 billion in North America, which would mean a $5,500 profit-sharing check under the new formula. Under the old formula, workers got $4,300.