Automakers Using Chinese, Mexican Production As Leverage With UAW
As talks with the United Auto Workers continue, domestic automakers may be using global production strategies to leverage lower wages from the massive union, Automotive News is reporting.
News that Buick may import most of its lineup from outside North America, or Ford shifting production from Michigan to Mexico, could be weighing on conversations to keep production in the U.S. and Canada at union plants.
“It’s a veiled threat to the workers,” Gary Chaison, a professor of labor relations at Clark University told Automotive News.
The automakers may be saying: “If you ask for too much, we can take the work out of the U.S. So, give us a reason not to shift more production overseas,” he added.
It was widely expected that the UAW would be looking to narrow the pay gap between its veteran workers and newer, Tier 2 workers who make considerably less during its talks with the automakers.
Automakers, for their part, have potentially looked to appease the UAW by announcing plant upgrades and more shifts for the cars it produces in North America. Already, General Motors in Canada said it would invest $12 million into its Oshawa Assembly Plant on top of larger investments in North American plants, including its Arlington and Flint Truck Assembly Plant. They were all announced after talks with the UAW started in July.
Those plant improvements may have be announced to leverage demands from the UAW to increase pay for its workers.
In North America, Tier 1 workers make about $28 per hour, and Tier 2 workers make around $15 an hour. According to the report, workers in Mexico make $8.24 an hour and Chinese auto workers make just $4.10 an hour.