About 1,550 of Allison Transmission Inc.’s Indianapolis hourly workers have ratified new five-year labor contracts, the locally-based automotive supplier announced Thursday.
The collective bargaining agreement for United Auto Workers Local 933 members goes into effect Monday and includes $5,000 signing bonuses.
The company and the union reached a tentative agreement on Nov. 16 that prevented a possible strike.
Allison said it will maintain a two-tiered pay system in the new collective bargaining agreement.
The more experienced tier-one and skilled tier-two workers will receive lump-sum payments totaling 3 percent of their annual wages each year from 2013 to 2016.
Production workers in tier two will receive base wage increases between 2 percent and 4 percent in 2013, 2015 and 2016. The workers will receive a one-time 3-percent lump sum payment in 2014.
The company has stopped basing its cost-of-living adjustments on a variable consumer price index. Instead, workers will receive a fixed annual payment of $1,000, it said.
Pension rates will not change for workers eligible for the retirement packages.
Tier-two employees, who have 401(k) plans, will receive 6-percent corporate matches, which is an increase from 5 percent in the previous contract.
Retirees’ health care benefits will be more like benefits offered by the Voluntary Employee Benefit Association that UAW retirees at Detroit’s Big Three automakers receive.
UAW Local 933 officers did not immediately respond Thursday morning to a message seeking comment on the contracts.
Allison stock rose 16 cents Thursday morning, to $21.12 per share.