One Page Paper - Sec 208 The benefits of the 4-year labor...

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Sec 208 The benefits of the 4-year labor deal between GM and UAW are detailed by John D. Stoll in The Wall Street Journal article, Deal to Help GM Cut Cost Gap with Rivals . GM has had difficulties in recent years keeping up with the low labor costs of rival companies such as Toyota Motor Corp., Nissan Motor Co., and Honda Motor Co. because GM has been paying more in pensions and healthcare for their employees. This new deal will change the healthcare liabilities, pensions, and other benefits with former and current employees. It will also allow for GM to give new employees defined contribution retirement programs rather than pensions which could potentially save the company $4 billion per year. With this new labor deal, GM can begin to catch up with foreign car companies, like Toyota Motor Corp., by cutting the cost gap of cars and investing more money in new technologies and models. This labor deal is major step forward for American car companies like GM. With the high costs of employee benefits and
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Unformatted text preview: healthcare, it has been difficult in the past for them to complete with foreign car companies whose employee benefits and healthcare are significantly lower. Not only will this deal allow GM to change the benefits of its new employees to reduce cost, it will allow for them to lower the costs of retiree health benefits. This decision made by GM was very well-planned and negotiated with UAW. Not only did this help with the burden of employee benefits, but it also increased the price of GM stock by removing the benefits from the debt portion of its balance sheet. This was crucial for GM to truly compete in today’s auto industry. With so much new technology, it is very important that they put as much money and effort as they can into developing new technology and new models to release into the market. McKracken, Jeffery. (2007, October 11). Deal to Help GM Cut Cost Gap with Rivals. The Wall Street Journal. Pp. A3 Alexa Stockover 810-83-0687 Sec 208 Janet Graaff...
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  • Fall '07
  • Nissan Motors

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