GM, UAW tout expanded work at Tennessee auto plant

SPRING HILL, Tenn. ― General Motors Co. and the United Auto Workers announced details of expanded work on Monday at the former Saturn plant in Tennessee that will create nearly 1,900 jobs by 2014.

GM said it will begin making the small sports-utility vehicle, known as a crossover, the Chevrolet Equinox at Spring Hill in the second half of 2012, with a $61 million investment.

UAW President Bob King said the return of assembly work at the plant for the first time since 2009 was an example of the cooperation between the union and automakers. King said he would highlight the expansion of work at Spring Hill as he continues attempts to organize nonunion Japanese, German and South Korean auto plants located mainly in the U.S. South.

“Spring Hill has a history as one of GM’s most innovative and flexible plants,” said Cathy Clegg, head of labor relations for the No. 1 U.S. automaker.

Broad outlines of plans for the expanded work were announced in September when GM and the UAW reached a four-year labor deal. A hallmark of that deal was new work at several plants, including Spring Hill, instead of raises for veteran union auto workers.

The second phase of the Spring Hill plant’s expansion will be the addition of a yet-unnamed midsize vehicle for the 2015 model year, GM said. Some 1,196 workers will be hired and begin work in 2013 for that product, said GM.

GM said its investment for that product at Spring Hill will be $183 million.

Of the total of 1,881 jobs to be filled at the Tennessee plant, 1,684 will be UAW-represented workers.

GM has just under 400 workers on layoff presently, and those workers will be given first chance to fill the Spring Hill jobs and new posts opening at its Wentzville, Mo., said Kimberly Carpenter, GM spokeswoman.

The new hires will be paid nearly $16 per hour, compared to about $29 per hour for veteran assembly workers. The second-tier pay is to rise to about $19 per hour over the four years of the labor deal.

GM first signaled that the Spring Hill plant may reopen as an assembly plant in January 2010, but it was not until this summer’s labor negotiations with the UAW that the plans were announced.

Spring Hill was put on “idled” status in 2009 when GM shut 14 plants as it went through bankruptcy.

United Auto Workers trust not planning quick Chrysler exit, two sources claim

DETROIT/NEW YORK ― A United Auto Workers trust fund will retain its shares of Chrysler Group LLC in a bid to maximize returns for retiree healthcare costs rather than follow the Obama administration in a quick exit of its investment, two people familiar with the fund’s strategy said.

The union’s healthcare fund, known as the UAW’s VEBA trust, is considering a range of options to cash in on its 45.7 percent stake in Chrysler, at a time when the value of that investment is rising, these people said.

The options could include selling shares to an outside investor, including Chrysler’s majority owner Fiat SpA, or selling in an initial public offering if the stock is eventually listed. Fiat owns 52 percent of Chrysler.

The UAW’s VEBA trust has delegated the decision on how and when to exit its Chrysler investment to its fiduciary adviser, a subsidiary of Brock Capital Group, one of the people said.

Last year, the trust hired Brock Fiduciary Services to manage its stake in Chrysler. Brock also represented VEBA during Chrysler’s talks to refinance $7.6 billion in government debt, and is currently calculating Chrysler’s market value for the union fund, people familiar with the matter said.

Under the 2009 agreement with the U.S. Treasury, VEBA’s proceeds from a sale of its Chrysler stake are capped at a “threshold amount.” This amount was set at $4.25 billion in 2009 and was set to grow at a 9 percent compound annual interest rate, according to the agreement.

When factoring in this interest rate, that cap on the union’s payout has risen to nearly $5 billion currently, one of the sources said.

In the event that proceeds from the sale exceed this amount, the excess cash goes to a third party or a holder. Fiat is the holder under its agreement with Treasury on Thursday, which has given the Italian automaker the option to take over all of the No. 3 U.S. automaker.