GM Leads Talks With the UAW Regarding Variable Payment

General Motors makes a step forward from other Detroit car manufacturers by beginning the talks regarding the key issue of flexible compensation with the UAW. Having less than a month left before the contract with the UAW expires, Ford Motor Co. and Chrysler Group LLC are still in the works regarding clearing the issues before starting the approach of bigger ones life the profit sharing and entry-level wages.

"We're pursuing common hourly and salary quality rewards for excellence in our negotiations,” Mark Reuss GM North America President was quoted as saying by The Detroit News.

He pointed out the fact that the company wants to tie variable compensation to more than just profits.

“We're working with our partners and in discussion on issues that are important to our employees and the business. Talks are progressing," Kimberly Carpenter, Gm spokesman, was quoted by the aforementioned source.

The variable compensation strategy seems like viable solution for all three Detroit car manufacturers, which revealed that they want to reward workers with bonuses, instead of increased base wages. Furthermore, UAW President Bob King has agreed mostly that the variable compensation is more rational than adding extra to the car manufacturer’s fixed costs.

“It would be really shooting ourselves in the foot to do wage increases.All those are factors that are measurable, that could lead to different forms of variable pay," Bob King, adding that he is open to tying profit-sharing to more performance-based metrics, including quality, productivity and attendance, the aforementioned source cites.