Automakers Using Chinese, Mexican Production As Leverage With UAW

Aaron Cole
by Aaron Cole

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.

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  • Vulpine Vulpine on Aug 25, 2015

    Maybe because I've worked in both union and non-union companies, I'm going to agree with the non-union ones here. Unions used to serve a very valid function in preventing abuse by the companies in the line of employee safety and working condtions. However, they've carried their power too far, their extreme wage demands driving labor industry out of this country. When a "common laborer" can make sometimes two or three times as much in wages as a mid-level manager supposedly supervising them, things have become skewed all out of recognition. Unions as they stand are no longer necessary. OSHA now stands as the worker's voice for labor safety, though admittedly sometimes it seems to work too slowly to offer timely benefit. A balance needs to be reached where the union's power must be directly linked to the success or failure of the company. The union workers earning in direct relation to the volume and pricing of the product they make. Good workers should be retained, but bad workers who habitually abuse their seniority privileges especially, should be released.

    • Vulpine Vulpine on Aug 25, 2015

      Where are your tariffs? They're on the trucks being shipped to the US, letting the American pickup truck get priced to ridiculous highs above that of even some of the most prestigious cars available in the US outside of the so-called Supercar market. That's where they are.

  • Olddavid Olddavid on Aug 25, 2015

    Farago is smiling. Those who believe in the benevolence of the employer also believe in Santa Claus. Good luck to your grandchildren with that position.

  • Proflig8tor Proflig8tor on Aug 25, 2015

    Since cars are a commodity, I shop for a domestic manufacturer which builds with union labor. I am middle class. My customers are middle class. A virtuous economic circle is created by supporting my customers with my purchases. No compromise is needed. My F150 was the best price / performance mix in the market, as was my wife's Fusion and the Mustang convertible we aspire to put in the third garage. Outsourcing overseas is about the least patriotic thing a company can do.

  • Mchan1 Mchan1 on Aug 25, 2015

    "Unions as they stand are no longer necessary." They are necessary but to a lower degree as long as management screws over their workers, which occurs in many companies. The craziness that unions have should be eliminated. Stop demanding stuff ALL the time and just work! Many people, even today, Wish to be employed instead of UN-employed which will happen to union workers. Companies, though, should STOP giving overpriced compensation packages to managers! It's this Inequality that will Never change and why unions still have their uses today. Each side will abuse their powers and each are a counter for one another. The problem is that each refuses to budge and that it's management that ultimately wins, unfortunately, as it can always move the factories elsewhere and don't have to take the workers along with them.