GM Avoids Tier One Wage Cramdowns… For Now.

In order to build the Chevrolet Sonic subcompact in America, the UAW agreed to a deal in which Tier One workers earning $28/hr could be forced to take a 50% paycut to keep the Sonic profitable for GM. Because the union membership never voted on the deal and can not strike against it, the agreement has rubbed salt in the wounds opened by the two-tier wage system. Some 40 percent of Tier One workers at the Orion Township plant where the Sonic will be built were supposed to be bumped to Tier Two, but thanks to strong truck sales, the Freep reports that all of the workers facing a cramdown have been able to transfer out of Orion and keep their Tier One status.

nearly 470 of Orion’s 1,100 first-tier workers have accepted GM’s offer to transfer to Flint, which is adding a third shift by the third quarter to help build heavy-duty pickups, the person familiar with the planning said. Another 71 have elected to stay at other factories where they’ve worked while Orion was idled to retool.

That means the rest of the first-tier workers at Orion will be able to return to the factory at their original pay.

And the good news keeps on coming: the NLRB appears to have rejected the complaints filed against the UAW by its members, and GM’s profit-sharing bonuses are said to be the biggest in the company’s history. In a few months, the UAW appears to have beaten back one of its biggest challenges since the bailout. Of course, if HD Pickup demand declines, the workers who transferred to Flint will be looking for work again, and they may be forced to accept wage cuts to go back to Orion. Meanwhile, the two-tier system will likely continue to create tensions on shop floors around the country. For now though, it seems the crisis has passed… just in time for a new negotiating session.