Detroit carmakers pledge to add 20,000 jobs

Detroit's big three automakers have pledged to create 20,000 direct manufacturing jobs by 2015 under contracts reached with the United Auto Workers this fall.

The four-year contracts, ratified after separate negotiations with Chrysler, Ford and General Motors, are the first labor deals cut since the recession threatened to topple the entire industry.

All three companies suffered during the economic downturn, though Ford made it through the tough times without federal aid. GM and Chrysler got huge infusions of federal money but ended up filing for bankruptcy anyway.

Since then, however, sales and profit margins have ticked upwards. The October retail sales report from the U.S. Department of Commerce showed strong auto sales, giving the industry its best October in four years.

During the contract negotiations, the car companies were reluctant to offer pay or benefits that would compromise their newfound growth and competitiveness. On the other side, the U.A.W. wanted a rollback of some of the concessions it made when the companies were struggling to stay afloat.

The resulting deals have been widely hailed as beneficial to workers, especially hourly employees. Some of the main provisions are as follows.

Chrysler will add 2,100 jobs. Also part of the agreement ratified Oct. 26:
- $4.5 billion in investments in new and upgraded vehicles
- Perks for new hires including tuition assistance, health benefits and life insurance
- An increase in entry-level wages to $19.28 per hour over the term of the agreement

Ford will add 12,000 jobs (including about 7,000 jobs that were previously announced). The contract, signed Oct. 19, also calls for:
- $16 billion in new investments, including $6.2 billion directly in plants
- No increases in base wages
- $6,000 contract-signing bonuses for all workers
- $7,000 in inflation-protection payments over the term of the agreement
- A boost in profit-sharing, including average payments of $3,700 this year
- An increase in entry-level wages to $19.28 per hour over the term of the agreement

GM will add 6,400 new jobs and bring back jobs that had been outsourced to Mexico and other countries. Other provisions of the G.M. contract, ratified on Sept. 28:
- $5,000 contract-signing bonuses for all employees
- Annual $1,000 bonuses starting in 2013
- Up to $4,000 in inflation-protection payments
- A new profit-sharing agreement that will result in bigger annual checks for workers
- Preservation of employee benefits and pensions
- An increase in entry-level wages to $19.28 per hour over the term of the agreement

The new jobs will have a ripple effect, creating more work in the auto industry as a whole, according to the U.A.W. "Together with the jobs created in suppliers and other businesses supported by auto manufacturing, a total of 180,000 jobs will be added to the country's battered economy," said U.A.W. President Bob King in a prepared statement.

Employment in auto and auto parts manufacturing has grown steadily in the last few years, according to the U.S. Bureau of Labor Statistics. In October, the number of jobs in these industries reached 710,400, up from a 10-year low of 622,700 in June 2009.

While those are notable gains, employment still hasn't reached the levels of the first half of the last decade, when the number of auto manufacturing jobs hovered between 1.1 million and 1.3 million.