Norwood Jewell, a nominee to become a UAW vice-president, said that the autoworkers want to eliminate the two-tier wage system that pays new hires at a lower rate than higher seniority workers. The wage system was agreed to by the union to help the domestic automakers as they went through financial troubles when the economy turned down in 2007. New workers are paid slightly more than half of what veteran autoworkers earn.
“The international executive board hates two-tiers,” Jewell told Automotive News at a General Motors Co plant in Flint, Mich. as the automaker was announcing $1.3 billion in investments in some of its plants in the U.S. midwest, mostly in Michigan. Jewell is currently director of UAW’s Flint region. “We didn’t do two tiers because it’s a wonderful thing,” he said, explaining that the financial circumstances six years ago more or less forced the two tier wages on the union. “We hate them. We intend to eliminate them over time.”
Current UAW contracts with GM, Ford and Chrysler expire in 2015. The union’s resentment of the current two level wage structure combined with strong profits at all three domestic automakers in recent years along with the fact that higher tier workers haven’t gotten a pay raise in ten years means that negotiations on the new contract will be difficult.
The car companies say that the lower tier entry level wages are necessary for them to be able to compete on labor costs with the transplant assembly plants operated by German, Japanese and Korean automakers. New hires start at just under $16/hr, rising over time to over $19/hr. Veteran workers make about $28/hr.
Jewell said that a key tactic in eliminating the two-tier wages will be the unions organizing those non-union transplant facilities, mostly located in the southern U.S. “If we don’t organize them and bring them up to our standard, we’re never going be able to totally eliminate the second tier,” he said.
Jewell also said that the companies’ profits will help the union make its case when contract talks are opened.