By on July 11, 2015


The newest round of negotiations between the Big Three automakers and the United Auto Workers will focus on narrowing the gap between veteran workers and “second-tier” workers hired after 2011, Reuters is reporting.

Talks between the UAW, which represents around 138,000 workers, and Ford, Fiat Chrysler Automobiles and General Motors will begin Monday. The UAW’s contract with GM ends Sept. 14.

Union President Dennis Williams said he wanted to focus on narrowing the gap between veteran workers, who make on average $28 an hour, and workers hired post-recession, who make on average $16 to $19 an hour, according to the story.

The raises would be significant for more than 39,000 workers who were hired after the recession on the “second-tier” system. More than 40 percent of FCA’s union workforce was hired at second-tier rates of $15.78 to $19.28 per hour, compared to 28 and 20 percent for Ford and GM respectively.

Falling labor costs have helped the Big Three stay competitive with other automakers, Sean McAlinden, chief economist at the Center for Automotive Research told Reuters. However, rising profits and sales have prompted Williams to call for the automakers’ to share profits with workers.

In an interview in February, Williams told Reuters that the union’s workers need the automakers to remain competitive in the long-term for his membership.

“We’re … mature organizations that have been through a hell of a lot together to survive,” Williams said. “None of us want to blow it.”

On Thursday, Ford announced it was ending production of the Focus and C-Max at its Wayne, Michigan plant by 2018.

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19 Comments on “Union Talks Set to Start on Monday, Will Focus on Raises...”

  • avatar

    Nice ,balanced post Aaron. The usual crowd, of UAW bashers, and haters will start spewing their uninformed vitriol shortly.

  • avatar

    The workers joining hands around the edge of the logo… shouldn’t 40% be skinnier than the rest?

  • avatar

    Do those wages include benefits?

    I was under the impression Tier II wages were closer to $14/hour, not including benefits, and that Tier I wages were closer to $62/hour, INCLUDING benefits.

  • avatar

    DW….I don’t know the UAW contract that well. I would have to assume that the $28.00 was the basic first tier wage.

  • avatar

    ““We’re … mature organizations that have been through a hell of a lot together to survive,” Williams said. “None of us want to blow it.””

    Wow, a guy that gets it.

  • avatar

    I do hope that the UAW leadership “get’s it”. It does not do them any good if they kill their source of income (company wages or union dues).
    My dad used to say about unions, ” Do you want to work for 10 dollars an hour or be unemployed at 20? BTW, he said that about 40 years ago.

    • 0 avatar

      It also doesn’t do the unions any good if all the concessions they made do nothing but make the rich guys at the top even richer.

      I’m also working for a company that was bankrupt a decade ago. Heavy pay concessions were made by the rank and file. Now the company is literally bragging about making record profits every quarter. The salaries have struggled to keep up with inflation, and yet executive pay and bonuses have skyrocketed, all while they continue to cut staffing and working conditions.

      There has to be a balance, and that isn’t it.

      • 0 avatar

        Juniperbug, let’s just hope they squirrel some of those profits away so that they don’t come begging to the taxpayers again or like you said, erode what was once a decent standard of living.

        Even for the next generation of front line workers, I was shocked to hear what the pay discrepancy was compared to those more senior workers in the same role. In that specific environment (front line), it definitely is a race to the bottom.

        I worked for a small carrier next door and witnessed the huge differences between a unionized and non-unionized work force. It was very disheartening.

        Thankfully, I’m now in a much better position a few provinces away in an entirely different industry, but I know who I can thank for making that happen. Another union.

        Nothing is ever safe though, just look what’s happening to the unlucky CAFAS employees in Toronto.

      • 0 avatar

        JuniperBug – it’s the swing of a pendulum. It never gets a chance to settle in the “natural” middle ground because those at the high end of each side cling to it tenaciously and don’t let a balance occur.
        It is frustrating to see the rich get richer and the rest of us get poorer. Tennessee Ernie Ford’s song Sixteen Tons sums it up.

  • avatar

    It is not just wages it is work rules, etc. a company has little incentive to invest if the uaw can start a strike to force concessions on the manufacturer. A low wage plus high profit sharing shifts the weight to the union and not just the company,,,,steel companies and others have tried that and it works. Of course if business slows down then everyone takes a hit including the unions. and the uaw will not take any cut in pay. i know many uaw members and half are pretty much nimwits and cannot think for themselves or even function without the union to keep them employed. my ex soninlaw is one of them. a complete drunk and an idiot that could not live without the union keeping him around.
    nuff said.
    thank god for the japanese and koreans; without them the uaw would have up paying ridiculous prices for poorly built products. of course the detroit gang of three were also a part in this conspiracy against the american working class.

    • 0 avatar

      >> thank god for the japanese and koreans; without them the uaw would have up paying ridiculous prices for poorly built products. of course the detroit gang of three were also a part in this conspiracy against the american working class.<<

      The Wagner Act. It allowed unions monopoly power and forbade the companies from banding together. A New Deal relic that has long outlived its value. Auto unions scored pay increases well in excess of productivity gains – no company could w/stand the uaw on its own. The result was underinvestment in product, allowing first imports and then transplants to proliferate. In the US, every heavily unionized industry has suffered such decline.

      Unions are essentially a cartel that transfer income from the buyers of the end product to themselves because the wages they exact are in excess of their real value. Unions have been able to do that because of political power they buy with the money exacted ultimately from consumers of products w/ overpriced union labor.

      • 0 avatar

        Just out of curiosity, what color is the sky in your planet?

        Google “labor strike Korea” sometime. Any “class warfare” in Korea isn’t simply the rich taking whatever they want from the rest like they do in the USA.

        “Unions gouging consumers”, what a laugh. In the US, some of the highest wages (silcon valley types) are proved to be artificially low due to explicit “do not compete” agreements between companies. Do you really think companies *anywhere* in the *USA* are willing to compete on salary? It isn’t the vestiges of “unions” destroying wages in the USA, regardless of whatever the laws on the books might say.

        • 0 avatar

          It’s a whole lot easier to compare the US to other countries if one doesn’t know anything about any of them.

          These clowns who think that Korean labor relations are just copacetic have obviously never read the news coming out of Korea.

    • 0 avatar

      Ya because workers in Korea certainly don’t strike and there hasn’t been musing, even on the hallowed pages of TTAC by none other than Bertel himself about the rise of the contract employee at Japanese factories, the end of corporate loyalty and with that a shift in quality form, “built by the hands of gods themselves,” to, “built by Greek heroes that probably partied too much the night before”

    • 0 avatar

      You’re correct to focus on work rules. Because of these rules, US unionized plants are much more inefficient than
      a) US transplants
      b) most foreign ‘union’ plants.

      An example of ‘b’ above – German plants often reduce hours across the board than resort to layoffs. In the magical, economically illiterate world of Unicorns and the UAW, such a proposal would be DOA. In UAW plants, fights have broken out over who ‘gets’ a (highly sought after) layoff…

      Also, what sort of so-called management team AGREES to the cancer of a two-tier wage system in their plants? Evidently GM and Chrysler MBA types.

      I understand the the Government had its thumb on the scales during the bankruptcy negotiation, but holy freakin’ crap. Even the most clueless career academic/government social justice type from this Administration could have grasped the inanity of a 2-tier wage. Why didn’t GM and Chrysler push against this more?

  • avatar

    The whole Ford Focus thing smells like posturing.

    What would they even move to MAP? Unless they just want to move it all to Cuautitlan and punt the Fiesta overseas.

  • avatar

    I remember in 1986, Lee Iacocca said, “We have plenty of jobs at $17/hour, we don’t have any jobs at $21/hour.” Chrysler workers were making $14/hour on the old contract.

    Well, the $17/hour Iacocca offered in 1986 would be $36.88 today. The $28/hour paid to senior workers today would be $12.90 in 1986, and the $16-$19 for the lower tier today would have been $7.37-$8.76 back in 1986.

    If you want to contest the health and retirement package or the work rules (ESPECIALLY the work rules), go ahead. The salaries, though, have had their purchasing power eaten up by inflation, thanks to the Federal Reserve financing our deficits with the printing press.

  • avatar

    Great lead pic. Williams looks like a classic union table thumper.

    Bob King was way too scholarly in appearance.

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