By on September 14, 2012

In this episode of Two Steps Forward, One Step Back , the CAW’s Dino Chiodo, chairman of the union’s master bargaining committee for Chrysler and the President of Local 444 in Windsor, appeared to shut the door on a UAW-style two-tier wage structure for new hires.

Chiodo told the CBC

“The company needs to recognize and realize that we are not taking concessions and we will not be going backwards in this round of bargaining…There is no two-tier structure that we’re interested in entertaining whatsoever at this point. It’s just something that’s against our principles.”

While a temporary two-tier structure was something that has been discussed, the comments are particularly pertinent in light of Sergio Marchionne’s frequent comments in the media regarding his desire to bring labor costs down, and his stated willingness to move production out of Windsor and into plants in the United States and other locales.

Of course, given Marchionne’s rhetoric, it’s not unreasonable to expect that the big dogs at the CAW will fire off some of their own comments as well.

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33 Comments on “CAW Official: “There Is No Two-Tier Structure That We’re Interested In”...”


  • avatar
    philadlj

    Better two-tier than NO-tier, AMIRITE?

  • avatar
    4-off-the-floor

    BUH-BYE…..CAW.

  • avatar
    icemilkcoffee

    The CAW is right. A two tier contract is a deathnell for a union. The newer workers coming in at $15/hr would never feel a sense of solidarity with the older workers with their $26/hr wages.

    • 0 avatar
      TEXN3

      And they shouldn’t. Entry level workers, anywhere, should never be paid as much as those with more experience. And they sure won’t have the solidarity, no matter what color your collar is. I sure don’t feel a sense of solidarity with guys making $50-60/hr in my engineering/consulting firm.

  • avatar

    It won’t be a Bye-Bye CAW either, we are not talking about a Country like Mexico either.Canada is not interested in a two tier Wage for sure, if we could have the same costs as you do in the USA, then it might be different, here everything costs 30% more!

  • avatar
    Nostrathomas

    In a way he’s right. They should ALL be making concessions, not just the young guys coming in.

  • avatar
    Neb

    Well, that’s something positive. Too often unions are all too willing to throw their younger members under the bus to protect the older ones.

    The rhetoric on both sides has gotten pretty big. I’m still thinking its mostly posture for let’s make a deal, though.

  • avatar
    kitzler

    Hey this is a free country just like the US of A; don’t like the pay, move to another job that pays better, if you cannot find one, then be glad you still have a job.

    The spread of computers and the Internet will put jobs in two categories. People who tell computers what to do, and people who are told by computers what to do.”. I think auto workers fall in the latter category.

    Guess you will never make a decent wage my friend!

  • avatar
    el scotto

    I think the two-tier system is an automatic adjustment for what wages should be for a semi-skilled worker. The Big 3 no longer has 70% of the market and all the car companies are trying for total world domination. The UAW and CAW have to figure this out.

  • avatar
    rnc

    Canada has what around 30 mill. people? that puts it a few rungs below the ladder of mexico, not only in production costs, but consumers (I guarentee you Mexico’s middle class is larger than Canada’s total population). USW (killed itself), UAW seemed to have caught on (after almost killing itself) until tier 2 outnumbers tier 1 and then tier 1′s day of reckoning comes, they strike, alot more tier 2 employees (not having pension and healthcare for life, what real alliance do they have to the UAW other than they currently need the UAW for jobs.) CAW, there’s a tunnel, at the end is a light or a wall)

    • 0 avatar
      el scotto

      There’s the slight issue of “rule of law” almost disappearing in Northern Mexico due to the drug cartels. A friend of mine is from there, he goes back infrequently, says the drug violence is too bad.

      • 0 avatar
        highdesertcat

        Some people would say that the “rule of law” has almost disappeared in Arizona due to the Mexican drug cartels. Crime’s up. Yet, even in Phoenix and Tucson people keep working and producing.

        Drug violence in the US is just as bad as it is in Mexico. We just hear a lot less about it because we’re already used to gun and drug crimes in the US.

        I, too, believe that the foreigners and transplants in the US (and Canada) have been unfairly targeted by the unions and would like to see them pack up their toys and move production to Mexico, thereby keeping more Mexicans at home instead of illegally over here, in the US.

        Most Americans haven’t got a clue about how bad the illegal alien problem is in the US. Those of us who live in the border states are confronted with it every single day.

      • 0 avatar
        28-Cars-Later

        @HDC

        “pack up their toys and move production to Mexico, thereby keeping more Mexicans at home”

        I thought that was part of the theory of NAFTA, and it wasn’t very accurate.

      • 0 avatar
        highdesertcat

        28-Cars-Later, actually NAFTA has helped some and as more factories are built or expanded in Mexico, we have actually seen some illegals move back to Mexico to get a decent job there.

        But the number that moved back voluntarily is just a drop in the bucket. Why give up the free foodstamps, free education, tax-free welfare money, medicaid, driver’s license and banking privileges that the US provides for illegals in America?

        The unions in America have unfairly targeted the transplants in right-to-work states because they can’t offer the employees anything that they haven’t already got now.

        So by moving production to where they are appreciated, the transplants can provide a dual service — that of providing jobs to illegals now in America and thereby keeping them at home in Mexico.

        The downside is all those Americans currently employed by the transplants, or those who could conceivably be employed by the transplants in the future, would lose that opportunity.

        But the unions in America don’t give a rat’s ass about them, unless they can get a chunk of their pay in dues. And we see this very same scenario play out in Canada. The CAW wants MORE from their employers! And in the process they may lose more than they bargained for.

        I’m not Canadian so I can’t comment on what’s right or wrong for Canadians, and I’m sure they, the Canadians, will work this out for themselves.

        One thing for sure, though. Diversification of production is looming in the future, even for Ford, GM and Fiatsler. And Mexico beckons.

      • 0 avatar
        28-Cars-Later

        “Diversification of production is looming in the future, even for Ford, GM and Fiatsler. And Mexico beckons.”

        I do not disagree but I just had an image of a scene I believe from Godfather II where Cuba has fallen to Castro and the Westerners are fleeing Havana. The cartels are already in de-facto control of northern Mexico, whose to say the Mexican federal gov’t doesn’t fall into chaos at some time in the next decade… then what of the billions in US investment?

      • 0 avatar
        highdesertcat

        There’s always a risk to anything anyone undertakes. But by and large, the Maquiladoras and other multi-national production plants operating in Mexico have been a great success. Not just for the carmakers but for all industries.

        Prior to Labor Day I took my Tundra into Mexico to a ceramic brick and tile plant south of Ciudad Juarez, and I had no problems at all. Not coming, not going.

        Hauled back about four tons of stuff for my wife’s dad and had my Mexican-born, naturalized-American daughter-in-law with me to help with the language. Didn’t even need cash money. Just used my father-in-laws’ corporate charge card.

        Yeah, the threat is always in the back of your mind, but I know people who have bullet holes in their cars from driving on I-10 near Tucson, AZ.

        A bullet has no political affiliation and will kill anyone regardless of nationality, political preference, race, color or creed.

        People in TX along the border with Mexico, and even downtown El Paso, live with the violence spilling over, but so do people in Chicago, Phoenix, Los Angeles, et al.

        If the Mexican government falls, and that is always a possibility, then Mexico and the investors will have to cross that bridge when they come to it. I do not believe that any cartels will govern Mexico.

        If more Mexicans can find jobs in Mexico to improve their own standard of living, more may stay there. Or, fewer will choose to come here.

        And if we Americans would not depend so heavily on illegal drugs, the demand for them would also be reduced.

        I don’t believe either will happen anytime soon. But you have to act. You can’t remain stagnant and in limbo. That’s where the US has been for the past three and a half years, in limbo and stagnant.

        Investment in Mexico would be a good thing IMO.

  • avatar
    areader

    “Hey this is a free country just like the US of A; don’t like the pay, move to another job that pays better, if you cannot find one, then be glad you still have a job.

    The spread of computers and the Internet will put jobs in two categories. People who tell computers what to do, and people who are told by computers what to do.”. I think auto workers fall in the latter category.

    Guess you will never make a decent wage my friend!”

    Oh it must feel so good to be secure in a superior position. You think. I’ve lost count of the personal stories I’ve read about in the WSJ and other places of people who had a good life, secure job, benefits, etc. Then the downsizing came and they were out. Not to worry, they had marketable skills. Except that market was found not to exist. They didn’t tell the kids since they were sure they’d find something soon. Kept putting on the tie and leaving the house to keep the neighbors from learning the truth. But eventually that all fell away and the support system they thought their education and experience gave them was not there. My guess is that a lot of people with this kind of coldness and arrogance have and will see things somewhat differently as the new normal becomes normal.

    I’ve been retired for over 25 years from the IT sector. I knew lots of people who “told computers what to do”. Did that myself for a few years. Most of those people were not impressive in their intelligence nor initiative. Just luckier than the guy on some production line in who their parents were, etc. Good luck, you might need it.

  • avatar
    mikey

    @areader…..Well said. I have been trying for years to convey that opinion here at TTAC.

    Six years ago,folks here at TTAC were aplauding,and rubbing thier hands with glee, as the blue collar work force was decimated.

    Today as the axe swings towards the cubicles, and those with higher educations, all of a sudden,it not quite as entertaining eh?

  • avatar
    Dimwit

    I hope that the CAW hold tough on this point. While not a real fan of unions, having a 2 tier wage system is totally idiotic. It will be the death knell for the UAW.

    If the job requires tiering then it doesn’t require a union because a union brings nothing to the table anymore.

  • avatar
    Potemkin

    I am amazed at how clueless the “we don’t need unions” group is. Do you think that your employer wouldn’t be very happy to pay you half or less than what you are getting now. What’s stopping him is that if you don’t get more than the union guys you will quit and join a union. The less the union guys earn the less the non-union guys will earn. That is a fact of history. There was no middle class before the advent of unions. Unions serve a purpose.

  • avatar
    CarShark

    How can the CAW leadership look the rank-and-file in the eye and say that this hard line stance is the best course of action? Unemployment is still high. There are plenty of people that could do their jobs in the U.S. and in Mexico. If GM can close their highly-rated Oshawa plant without batting an eyelash, what makes them think this will be any different? Marchionne is trying to make a name for himself, and one of the easiest ways to do that is to stand up to the union’s demands. If they would have made more reasonable statements to the media, they could’ve been able to make Marchionne the bad guy, but now they’ve given him cover.

  • avatar
    Guildenstern

    I’m not usually a Union supporter, I’ve just heard too many stories of union abuse to be a big fan of theirs. But the CAW is in the right here, it’s not the workers fault that management can’t sell cars.

    Chrysler is making a profit, If it wishes to make MORE of a profit then it should be the suits job to find out how to sell more cars, not make the production costs cheaper. Turning inward to boost profits only weakens the whole economy. It’s insane to basically say “We are going to cut wages to a point that our own employees can’t afford a new car.” What do they think will happen then? Those employees end up with less money to put into their economy, that economy becomes weaker, and even less cars get sold. How is that a correct or appropriate solution to the problem of not enough profit?

    Basic labor wages need to be protected, they work as a peg for most other non executive pay rates. If you let them slip too low soon you’ll find Nobody can afford much of anything. The Union isn’t just doing this for itself, it’s working for the greater good. And that’s nice to see for a change.

    • 0 avatar
      jimboy

      Especially when they want their employees to drive the cars they make. Well, you cant buy a new car @ $15.00 bucks an hour.

      • 0 avatar
        rnc

        If they can’t afford what they are making at $31k/yr (and they aren’t making BMW’s) then their situations financially have nothing to do with what their houry wage is.

      • 0 avatar
        28-Cars-Later

        @Rnc

        I disagree. A single person might be able to comfortably purchase a new 200 at $30/hour in 2012 dollars, but remember you’re not supposed to blow your budget on a car and fuel, and if you do it had better be worth it. IIRC $15/hour worked out to be roughly $800/biweekly pay in 2006 US taxes/dollars (when I was paid this amount). Rent at the time was $642, so if insurance was $75 month, fuel $100, and a (non lease) payment of $300 (Sebring 60 month, none down), is $1117 of your $1600 (or 69% by my math).

        Assuming 2012 costs, 60 month base model 200 with 2K down is $310 according to the Chrysler website ($19095 net price with auto). My current rent here is going to $712 next month, and assuming I had to keep 2006 fuel consumption, I’m now spending at least $200/month on gas. So $712 + $75 + $200 + $312 is $1299 (81%). So if you’re spending 81% of your budget on rent and just car related things, you are either not buying a new car from ‘work’ or you are living at home in order to afford it (this assumes retail pricing and no $99 sweetheart lease for Chrysler employees).

      • 0 avatar
        ajla

        I’m jealous of your rent numbers. Around here if you spend under $800/month you’ll probably be living in some roach-infested converted meth lab surrounded by crazy people and your new 200 will end up getting vandalised or stolen. People on the internet always write that central Florida is a cheap place to live and I guess it is if you don’t mind clutching a shotgun at all times.

        Plus, a lot of people finance for 72 months these days and the 200 isn’t the cheapest option.

      • 0 avatar
        28-Cars-Later

        @ajla

        My thoughts were midsize as the base Dart (60 months/2K down) is $17,890 w/auto or $288 a month (the automatic is standard on 200) so basically a midsize 4 banger runs you $22 more per month; no way I am buying the Dart over the 200. Dart would make more sense for those who desire a manual or slightly smaller ride.

        Pittsburgh still has somewhat affordable rents and real estate buys, although this seems to be rapidly changing due to FED/gov’t mistakes in the past 12 months. This building has become difficult to get into since I moved in (2006). I was fortunate because my best friend lived here at the time and gave me a glowing reference, two weeks later this unit opened up and I’ve been here ever since.

        There are units over in Oakland (Univ of Pittsburgh/UPMC area) which may run you $600-$800+ with no parking and a concealed carry permit in parts of it is recommended due to its proximity to the ghettos. I live in the South Hills so there isn’t as much of a rent demand as you have closer to the city or in the east end.

        EDIT: 2012 200 LX with 10K-12K on the clock black books around $14,700, no data on Dart.

    • 0 avatar
      el scotto

      Anybody’s financial situation is dependent on their salary or annual wage. When I ran our family company I tried to get as many guys on union jobs as I could. My workers made more, my company made more, payday was on Friday, and turds float downhill.
      They are making making BMWs in America.
      http://www.remappingdebate.org/article/tale-two-systems?page=0,2
      http://www.washingtonpost.com/wp-dyn/content/article/2010/10/26/AR2010102607165.html
      Disclosure: I live in Virginia and can walk to the mini-mart and buy the Post. I have no idea who sponsors/funds remapping debate.

  • avatar
    DIYer

    The jobs in Canada will move to Mexico, the Big 3 are just looking for any excuse to do so. CAW’s all-in labor costs are $60/hour, and Mexico’s are only $5.50. Canadian jobs won’t go to the US. UAW labor costs are slightly less than Canada’s; but politically, the Big 3 won’t send US jobs to Mexico right now.

  • avatar
    jimboy

    I get the feeling that mostly what I’m seeing here is pro and anti Union rhetoric. I don’t think most of you even have a clue exactly what deal either side is fighting for. And frankly, unless you work for the union or one of the automakers it really doesn’t concern you at all.
    Taxes and cost of living are higher in Canada than the U.S. and Mexico, that’s a fact.
    Canada has been building cars as long as the U.S., and far longer than Mexico, that’s a fact.
    Mexico has severe problems with corruption and social issues, that Canada and U.S. don’t, that’s a fact.
    Canada has a better social safety net than either the U.S. or Mexico, subsidized by our higher taxes and wages, that’s a fact.
    Therefore, the automaker is required to kick in LESS in Canada than either the U.S. and Mexico, which costs the automaker less in benefits in Canada, that’s a fact.
    So, please predicate your arguments, ( and opinions ) based on some facts, rather than wishful thinking, thanks.

  • avatar
    bill mcgee

    One thing I’ve wondered from watching real estate shows on the HGTV station is about the cost of housing in Canada . Most of their content is out of Canada and the prices for both rental and purchasing of residential real estate seem sky-high . Most of these involve prices for properties in Toronto and while I know that Vancouver’s prices are much more don’t know how they compare to Windsor . The houses they show in Toronto usually are small ,dark , dank basements , no garage , often no parking , in crappy shape , zero curb appeal and they are like at least $500k . Of course its all location, location , location in real estate but don’t know how the average schmuck affords it . Of course , other side of the border Detroit sounds much cheaper . And of course the big three or any other company is unlikely to care about paying more so their workers can get better housing when right across the border it’s cheaper .


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