MAIN INDEX APPENDIX L SOURCING During these negotiations, the Union raised numerous concerns about the Corporation’s sourcing actions and the impact on employment opportunities. To that end, the Corporation will work with and assist the Union at both the Local and International levels to preserve jobs, replace jobs which may be lost by outsourcing action and to create jobs for Protected employees and laid off employees. It is an objective of the Corporation to grow the business and to continue to rely upon its employees and facilities as the source of its products. During the life of the current Agreement, the Corporation will advise, in writing, the Union members of the Sourcing Committee of the Labor Policy Board meeting results relative to sourcing recommendations, including the number of potential jobs affected. Additionally, data regarding incoming and outgoing work will be given to the International Union in a quarterly meeting. (The Corporation will provide inquiry access to the International Union through the use of a computer terminal.) In this manner, the parties can judge the success of mutual efforts toward improved job security. The Corporation agrees to incorporate the procedures and structure outlined herein when making sourcing determinations during the current Agreement. The rationale for sourcing actions will consider the criteria of quality, technology, cost, timing, statutory requirements, occupational and related environmental health and safety issues, the impact on long-term job stability, the degree to which the Corporation’s resources can be allocated to further capital expenditures, the overall financial stability of affected facilities, and the impact on related facilities. Other factors considered by the Corporation before a final sourcing decision is made will include the effect on employment, and job and income security costs, on both a short and long-term basis. Such criteria shall give equal weight to the full impact of a sourcing action on General Motors-UAW represented employment levels and the job and income security of General Motors-UAW represented employees. The National parties will jointly further develop the above criteria to be used to address sourcing issues. In developing this criteria transfer pricing profits will not be considered in making sourcing decisions. Only appropriate return on investment and burden will be considered. Following the development of the sourcing criteria, the National Sourcing Committee may form Joint Task Forces to ensure full implementation of such criteria throughout the Corporation and, on an as needed basis, to address any specific sourcing areas of concern identified by the Union. Pertinent criteria will be applied consistently in comparisons of internal and external supply capability. The International Union and where appropriate the local union will be provided full and timely access to all appropriate data, including financial information, that is pertinent to evaluate product competitiveness and contemplated sourcing. The Union agrees to keep all such information confidential until the Corporation consents to its release. Further, in this regard, the plant Chairperson will designate in writing those Union representatives who will have access to the quote package and related information. If the Local Committee cannot resolve a sourcing issue, it may file a grievance at the second step of the grievance procedure. In addition, the following specific commitments have been made to address sourcing-related job security concerns of UAW members: 1. Insourcing The Local JOBS Committee will discuss the practicality of insourcing, in whole or in part, work previously outsourced or new work which the Committee identifies as that which might be performed competitively within the location based on the criteria outlined above. To assist in this process, the International Union will be furnished a complete master file of commodities which will be used to generate a list of parts similar to those currently manufactured at the location that have been (1) outsourced from that location or (2) are currently manufactured by non-GM/UAW suppliers for General Motors. This list will be updated and expanded to include supplier expiration dates, supplier location (city and state), annual volume, and Union affiliation if known and will be furnished quarterly or as otherwise agreed by the National Parties. Thereafter, the parties will initiate efforts to insource particular work consistent with the aforementioned criteria to create prospects for growth and to provide jobs for Protected employees and employees on layoff. If it is established that certain work can be performed competitively judged by the above criteria, management will adopt the Committee’s proposal and barring unique or unforeseen circumstances, bring the work in-house. The Union shall thereafter obtain any necessary approval or ratification within 30 days of the decision to bring the work in-house. 2. Outsourcing Outsourcing as used herein means the Corporation’s sourcing of work from GM/UAW locations, including work connected with current, new or redesigned vehicles, fabricated parts, powertrain, and component products. When the quoting process begins, the local Union at the affected location(s) will review and have access to the entire request for quotation package for this work along with cost book information. Upon receipt of this package at the plant, the Chairperson and the Personnel Director will indicate on the accompanying notice (Notice of Potential Outsourcing) that the information has been received. This notice will include a description of the work involved and will be mailed to the Vice President and Director of the General Motors Department of the UAW, and the Group Vice President - Labor Relations, North American Operations. Following receipt of the request for quotation package (or in the infrequent instances where a quote package is not utilized), the local parties will have the opportunity to jointly develop a plan to perform the work competitively, judged by the criteria listed earlier in this Appendix. The local Union will be provided full and timely access to all appropriate data, including financial information that is pertinent to evaluate product competitiveness and the potential sourcing action. Prior to submission of the initial quote response, the information contained therein will be reviewed by the local parties. At the close of the quoting process, the local parties will be advised in writing of the most favorable quote response which best meets customer requirements and the terms and conditions contained therein. If this quote response is other than the one submitted by the affected location(s), a written notice will be issued to the Chairperson which includes the reason for the potential outsourcing, the quote price from the affected location, if applicable, the terms and conditions of the most favorable quote response, the potential jobs impact, and the anticipated impact date. Thereafter, the local parties will be given an additional 30 days, or longer when possible, to meet the terms and conditions of the quote response referenced above. A copy of this notice will be sent to the Group Vice President - Labor Relations, North American Operations, and the Vice President and Director of the General Motors Department of the UAW. If it is established that the work can be performed competitively, judged by the criteria listed earlier in this Appendix, Management will, barring unique and unforeseen circumstances, keep the work in-house. The Union shall thereafter obtain any necessary approvals or ratification within 30 days of the decision to keep the work in-house. The sourcing authority will not enter into a contractual relationship with a non-GM-UAW supplier until such time as the designated management representative of the impacted location provides written verification that the above notification procedure and discussion by the JOBS Committee, has taken place. Additionally, International Union input will be sought by the Corporation and its Groups and Divisions as early as possible in the outsourcing decision-making process in order to allow for more thorough discussion and to permit the parties to better assess the impact of outsourcing on the long-term job stability of employees and the financial viability of given Corporate locations. The Corporation agrees to a full disclosure to the International Union of the procedures utilized in sourcing activities. 3. Temporary Outsourcing The National Parties agree that temporary outsourcing is not intended to provide a means for circumvention and abuse of the normal outsourcing notification procedures outlined in this Agreement. Outsourcing notices issued for temporary situations such as: breakdown of machinery or equipment, plant rearrangement and/or modernization, spot buys, model changeovers, and factory assists, etc., will be incorporated in the Quarterly Sourcing Report. By incorporating these occurrences in the Quarterly Sourcing Report, it is mutually understood that legitimate temporary outsourcing will not be considered in determining the Corporation’s hiring requirements, pursuant to Appendix K, due to the scheduled return of the outsourced work. The National Parties will monitor all temporary outsourcing to assure the return of such work in a timely fashion in keeping with the intent of this Appendix and Appendix K. Beginning with the effective date of this Agreement, Temporary Outsourcing Notices which remain open 30 days beyond the date the work was projected to be returned will be converted to permanent notices and the manpower associated with the work will be counted in the Net Sourcing calculation under Appendix K. Upon return of the work after a notice has been converted to permanent status, a notice of insourcing will be issued to the impacted location. The Parties understand that circumstances do arise wherein the projected return date of temporarily sourced work legitimately requires an extension and the above provisions are not intended to create Appendix K liabilities in those circumstances. Any questions or problems that may arise relative to the meaning and intent of this understanding will be reviewed and resolved by the National Parties on a case-by-case basis. 4. Future Product Sourcing International Union input to early sourcing decisions will be sought by the Corporation’s Groups and Divisions. In that regard, the International Union will be notified in writing by the appropriate Group or Division upon “Architecture Studies Initiated” to proceed with a study involving a new or redesigned vehicle, new engine, or transmission. A comparable notification will be given for those components and subsystems that are not included in a new vehicle development process. Semi-annually, as a part of quarterly meetings referred to earlier in this Appendix, a confidential review will be held concerning future product programs which will identify new or redesigned vehicles, subsystems, or component parts. These semi-annual meetings will be attended by the Group Vice President - Labor Relations, North American Operations, and the Vice President and Director of the General Motors Department of the UAW, both of whom may also be requested to attend additional meetings, if deemed appropriate by the National Parties. In reviewing future product programs, representatives from various Corporate disciplines; e.g., Marketing, Engineering, and Product Planning, may be invited to attend. In addition, an annual powertrain review meeting will be conducted by senior powertrain operations management. This meeting will include a review of the powertrain long-range plan and anticipated effect on powertrain plant product capabilities. Following the notification, the members of the National Committee shall have responsibility for overseeing the interface with individual vehicle platforms and the powertrain division. The union representative for each car and truck group, Powertrain, and the Metal Fabricating Division will work with members of their respective organizations so as to gain information and knowledge and to provide input into sourcing discussions and sourcing determinations for those organizations. To this end, the car and truck groups will designate a vehicle line specialist who will provide information to the respective UAW representative concerning new major vehicles or major redesigned vehicles. Information discussed at this meeting will typically include program objectives, major program milestone dates, marketing objectives, and customer requirements, and potential assembly and stamping plant manufacturing capabilities. Additional program reviews will take place near the “Deliver Charter” and “Contract Signing” milestones. When there is a need for a Union representative as specified above to interface with a component division relative to sourcing discussions at their organization, the contact should be made through the divisional industrial relations contact for that component division. The Corporation agrees not to use the results of such discussions to obtain more attractive contract terms from outside suppliers in lieu of keeping the work in-house. If requested, higher level meetings or discussions on these matters will be scheduled. The implementation of this process should provide the parties with the mechanism to take advantage of every opportunity to use internal resources and to create jobs for Protected employees. The commitments expressed in this Appendix are intended to contribute significantly to our cooperatively working together to provide General Motors employees in the United States improved job security by growing the business. MAIN INDEX