By on March 25, 2015

UAW Member Assembling Corvette in Bowling Green Circa 2015

While the UAW wants to “bridge the gap” between Tier 1 and Tier 2 employees, Ford and General Motors want to have a Tier 3.

Bloomberg reports the two automakers are considering the issue before its talks with the union in September, proclaiming the new tier — for lower-skilled labor — would help them better compete against the transplants and their non-union employees through lower labor costs.

Meanwhile, the UAW leadership are seeking raises for both Tier 1 and Tier 2 employees, just as its rank-and-file want an end to the two-tier wage system entirely. The thought of a Tier 3 would prove hard to stomach among all in the union, though such a tier could help bring work that had been outsourced to suppliers in-house, as those employees would not be assembling vehicles.

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33 Comments on “Ford, GM Looking Into Tier 3 Wages For Lower-Skilled Workers...”

  • avatar

    I read that the wages are still higher at GM and Ford, making it harder for them to compete, or giving them reason to automate more. While I think everyone is entitled to a raise now and again, it was YEARS for me, amidst several layoffs, during the recession.

    As a professional, I am salaried. So my weekly rate remains no matter how many hours I work, usually 50 or more. I will sometimes go in on Saturdays, I will sometimes have to work overnights, and I travel. Still, I am a manager and am responsible for the success of my projects. We don’t have a set bonus structure, and they don’t amount to nearly what the autoworkers are getting.

    I’m not complaining, I am merely stating REAL LIFE. Here are the current rates, published by Allpar:

    U.S. Avg. Auto Worker Costs

    Mercedes-Benz Non-Union $65
    General Motors UAW $58
    Ford UAW $57
    Honda Non-Union $49
    Fiat Chrysler UAW $48
    Toyota Non-Union $48
    Nissan Non-Union $42
    Hyundai Non-Union $41
    Kia Non-Union $41
    BMW Non-Union $39
    Volkswagen Non-Union $38

    Average $48

    • 0 avatar

      What is included in the hourly figure?

      • 0 avatar

        That’s supposed to be an all-inclusive number, with all bennies (but not bonuses). I’m not sure if they have to pay into their health plan, but they didn’t always, if they are now. I think the rate of pay for 1st tier starts around $14.50 and goes up to something like $19/hr., and the top tier is at $28/hr. The Big 3 paid out bonuses ranging somewhere in the $4,000-$9,000 range, if memory serves, but don’t quote me. I suspect, with OT, some of these guys are making $70-80,000 plus bonus, AND have a great set of benefits. Not too bad for assembly line work.

    • 0 avatar

      Is this an average including overtime? I can only seem to find figures from 2008 which include benefits for retirees that should now be the unions’ responsibility.

  • avatar

    We have a two-tier wage scale at work for hourly employees. There is a dollar difference between the two. I wonder what they have in mind for a three tier system?

  • avatar

    Back in the good old days when the Det Three ruled America’s car market, it was not a problem paying janitors a buck an hour less than categories like tool & diemakers and electricians. We had guys mowing the front lawn making nearly as much as the ones programming controllers or sculpting million dollar dies.

    For better or worse, that’s just no longer viable.

  • avatar

    Ford, GM and Chrysler used to race each other on the track. Now they are in a race to the bottom. Yesterday’s Wall Street Journal had an article about declining wages at auto parts manufacturers, with some paying US workers as little as $10.00 per hour. From the article: “Wages are much lower for American workers at parts companies than at car manufacturers, though both have trended down. In 2014, the average hourly wage for production and other nonsupervisory workers at car-parts makers was $19.91, down 23% from a decade earlier in inflation-adjusted terms. That compares with a 22% decline to $27.83 at makers of motor vehicles, according to the Bureau of Labor Statistics.”

    • 0 avatar

      This goes back to when the UAW was precedent-setting in its wage demands. Their wages and benefits were at the top of America’s pay scale and, it was believed, to be good for America and good for the world. A model to behold and envy. Probably so, after the end of WWII and the reconstruction phase of Europe and Japan.

      The UAW forced wages and benefits to the level where they were no longer competitive with what others elsewhere could do the same job for. No other country could sustain such labor costs and now America can longer support such labor costs.

      This included parts manufacturing.

      Manufacturers and re-manufacturers simply took their plants to areas with lower labor costs.

      In essence, the UAW’s chickens have come home to roost in that they were successful in collectively bargaining themselves into non-competitiveness because of their labor costs.

      • 0 avatar

        HDC….So the salary workforce, and senior management people with their bloated head count, and obscene bonuses ??? I suppose they had zero impact, on the bottom line.

        • 0 avatar

          @mikey, I’m reminded of when I was working part time for Home Depot (and teaching). They gave an incompetent CEO mulit-millions to go away.

          Wish I had a golden parachute.

        • 0 avatar

          mikey, the salaried workforce and management get paid according to a different scale and set of expectations.

          It’s the laborers, the worker bees, the assemblers, the Blue Collar workers, that are the variable here, IMO.

          Engineers, management, bean counters, administrative and office workers, get paid according to scale in accordance with peers in other industries.

          If employers didn’t pay engineers and managers what they were worth (to the industry), these people would seek employment elsewhere and get paid what they’re worth by employers who value them more.

          My best bud has a BS degree in Business Management (BSBA) and an MBA in Management and Finance with a minor in Computer Systems and Networking. Pretty smart guy bes!des being a good man.

          Plenty of job offers out there for him, but he wanted a certain amount of money for his services but was unwilling to move to where the jobs were.

          So he quit his job and US Civil Service career he started after he retired from the US Air Force and moved to the area where I live.

          People with the chops to demand outrageous pay and bonuses get them because they didn’t spend all that time and money getting an education so they could get paid at the Labor end of the pay scale.

          Laborers are important, yeah. But labor is a dime a dozen. And that’s the way Management and Owners see it. You can always get somebody to do the labor.

          What all unions want is to share in the profits of an employer without having to take any risks or losses.

          In the case of the UAW, they got exactly that, with some unintended consequences of driving two of their employers into bankruptcy.

          But I realize that is a moot point these days, in the age of taxpayer-funded bailouts, handouts and nationalization.

          Now that the NLRB has weighed in, in the US, the deck is stacked against the owners and employers, and hopefully, more will seek their ROI in the NAFTA zone without undue interference from the American unions.

          BTW, I offer my comment with respect to your decades in assembly where, no doubt, you feel you were not paid what you are worth. But that is the way it is in the business world. That’s the way it is when I hire-in my day laborers, some of whom are highly skilled stone masons, carpenters, bricklayers, electricians, plumbers, etc.

        • 0 avatar
          Dave M.

          That’s not all of us salaried management folks, Mikey, usually just a select few. I usually work 70-80 hours a week; my salary doesn’t change.

          But I understand your thoughts. The big 3 management was just as complicit as the UAW in the race to the bottom in their myopic little world. They also get bonus points for heading up the design process of completely uncompetitive product.

  • avatar

    The union gave the opening for two tiers and now it seems the Big two want to expand it, what a shock, I never got how the UAW sold this to the members, it must put a wedge into the workers, but I am not sure the leadership really cares about the worker. Not sure if the workers still get a sweet deal on healthcare or not but if they do my guess is this is where they will be taking a haircut.

  • avatar

    In the early/mid 1960s, GM made 10% profit margins. GM’s manufacturing, sales, marketing–most everything was considered the best.

    I wonder how much GM’s CEO and execs made then? Was it 5x the average auto worker? 10x? 20x? I bet it was close to 10x.

    Compare that to today’s Detroit 3. Then use the same measure for Toyota (which comes closest today to being what GM was in the 1960s). What does Toyoda make? How about Hyundai’s CEO? Honda?

    Perhaps the US execs are overpaid?

    No, that’s the “market”, as deemed by the board of directors–who are also execs.

    And at least the auto execs preside over the creation of useful things, compared to bank and Wall Street execs who make even more money playing with other people’s money.

    I’ve applied to GM’s board–I’m willing to be a member for ONLY $100k a year, a significant savings. In return, I will attend 3-4 meetings at a swanky hotel in a nice area, lol

  • avatar
    S2k Chris

    As an outsider, it sure makes intuitive sense. Why should the guy bolting on the head get the same pay as the guy bolting on the wheels as the guy pushing the broom? High skill, low skill, no skill. Honestly, I’d expect them to have a dozen or two job codes, tiered (welder apprentice, welder I, welder II) for job skill required and/or difficulty (the guy standing there welding on a fender might not get as much as the guy who has to crawl in and weld inside the trunk, or whatever.)

  • avatar

    IMHO — General Motors management and the UAW are equally to blame for their troubles and deserve each other. Several months ago I was able to vote with my wallet.

    • 0 avatar

      You have joined the ranks of millions who did the same.

      I was a rabid GM fan at one time and drove GM products for most of my life. That all changed in 2008 when I found Toyota.

      Better ingredients. Better pizza!

      • 0 avatar

        You are just 7 yrs ahead of me,I also was a rabid GM fan . Now we are enjoying the same pizza.

        • 0 avatar

          Yes sir! And while John enjoys driving his Camaro, I enjoy driving my Tundra.

          • 0 avatar

            Meh. I drove the Tacoma when I went truck shopping. It was nothing special. The Frontier was a slightly cheaper feeling truck with a better feeling motor. When I was full size shopping the Tundra was not even in the same class as the F150 or Ram. I know you feel otherwise, but the fullsize truck market kind of agrees with me.

  • avatar

    I’m very much a capitalist, but I also believe in proportional meritocracy (as difficult as that concept may be to mete out).

    Let us reasonable people acknowledge that the world now is as bizarre from a socio-economic perspective as it’s been in at least 80 years.

    Someone mentioned that the average CEO of a Fortune 500 company makes 40x what the average employee of that same company earns annually.

    Yet, it’s far more imbalanced than that.

    It’s closer to 80x.

    Let’s consider that GE payed negative taxes for several years now (being a better accounting exploitation company than anything else).

    Let’s consider that CronyCapitalism has soaked taxpayers more thusly with each passing year, where taxpayers are mauled by politicians, who are themselves bribed by energy, banking, financial, defense & other corporate entities, to let ridiculously wasteful and even criminal contracts/bills/invoices.

    Let’s consider that successful corporations can make massive profits in the US, availing themselves of US infrastructure, yet avoid taxation on accumulated profits by moving those profits offshore.

    As a capitalist, even I can see that if the current trend towards uneven and unfair legislation, regulatory intervention & market distorting government policies in general will lead to decreased productivity and growing inequality with each passing year.

    The legislative body of a nation should not be allowed to be purchased wholesale by private, commercial interests, Mitt Romney did a disservice to state that a collective corporate entity is the equivalent of a “person,” and the Citizens United decision was one of the all time tragedies in SCOTUS & U.S. History.

    • 0 avatar

      I was going to respond to some of the comments here but this is a pretty good summary and saves some typing thanks DW

    • 0 avatar
      S2k Chris

      “Someone mentioned that the average CEO of a Fortune 500 company makes 40x what the average employee of that same company earns annually.

      Yet, it’s far more imbalanced than that.

      It’s closer to 80x.”

      Consider the amount of shareholder value a good or bad CEO can create or destroy with a single press conference. Compare that with how much a good/bad factory line employee can create or destroy.

      “Let’s consider that GE payed negative taxes for several years now (being a better accounting exploitation company than anything else).”

      Always cracks me up when people get mad at the people who are good at playing the game rather than the people who made the rules of the game being played.

  • avatar

    >>Yet, it’s far more imbalanced than that.

    It’s even worse: Meg Ryan gets 8000x what I make when I act at the community center.

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