General Motors Co. said its new labor contract will cost the company $215 million over the next three years as it raises wages for entry-level employees and buys out its most expensive laborers.
Chief Executive Officer Dan Akerson told analysts during a conference call that the new contract keeps GM competitive with only a marginal boost to its $5 billion a year labor tab. Wage increases for entry-level workers, $5,000 signing bonuses and other benefits add up to $675 million through 2013. GM got $460 million in savings to partially offset pay increases, the company said.
Labor costs will rise 1 percent a year, which is the smallest increase in a GM contract in four decades, GM said. By keeping labor cost increases in check, GM will be able to add jobs and reopen one plant in the U.S., Akerson said.