With the current contract between the United Auto Workers and the “Detroit Three” automakers set to expire in Septmber, it appears that the union and companies are set to clash on the issue of tier-based pay for the UAW members.
In advance of the auto talks that don’t officially begin until July, this week, the UAW held a bargaining convention in Detroit for its UAW auto delegates.
Within the convention, according to Automotive News, opposition to the existing two-tiered wages that have been in effect since 2007 was “pervasive.”
The hundreds of UAW delegates who have assembled here are sending a clear message to UAW leadership, and Detroit 3 negotiators indirectly, that they want Tier 2 rolled back from the prominent position it has achieved at Detroit 3 factories.
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Delegate Scott Houldieson, newly elected vice president of UAW Local 551 representing workers at Ford’s Chicago assembly plant, said Tier 2 violates the UAW ideal of equal pay for equal work.
Under Tier 2, entry-level workers earn roughly half the wages and benefits of long-time auto workers for doing the same tasks as their higher-paid co-workers.
“When I raise my fist, I am talking about unity, I am talking about solidarity,” UAW President Dennis Wiliams reportedly told delegates.
“I truly believe that our companies know that we can be both creative and thoughtful,” Williams said. “But make no doubt about it, they also know, that as we share in the bad times, we must equally share in the good times.”
While UAW members want to eliminate the two-tier wage structure, Bloomberg reported on Tuesday that both General Motors and Ford are considering asking the UAW for a third, lower-paid tier to be added to their contracts.
This new pay rate for some lower-skilled jobs would help the car manufacturers lower labor costs as they compete with Asian and European rivals that typically pay less at non-union U.S. plants, said the people, who asked not to be identified discussing private plans.
GM and Ford’s idea for adding a third tier runs contrary to the statements previously made by Chrysler Group’s CEO Sergio Marchionne whos has repeatedly decried the existing two-tier structure–even going so far as calling it “offensive” at January’s Detroit auto show.
“You cannot have two classes of economic packages [for workers] who do the same work,” he said, speaking to reporters at the Detroit auto show Monday. “It’s impossible. It’s almost offensive.”
With the automakers and UAW being hammered by competition—foreign and domestic—a UAW strike can only hurt the Detroit Three and, as well, further tarnish the UAW’s reputation with the non-union workers the UAW is trying to unionize in the South.
Nevertheless, based on the rhetoric so far, it appears the UAW and, at least, two out of the Detroit Three appear to be on a collision course.
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