UAW Delegates Urge Elimination of Two-Tier Wages

United Automobile Workers delegates attending a bargaining convention in Detroit made it clear Tuesday that they want the elimination of the two-tier wage structure as well as wage increases during this year’s contract talks with General Motors, Ford and Fiat Chrysler.

“I am hoping that we get better wages — it’s been a long time since we’ve had wage increases,” said John Johnson, 41, a member of UAW Local 1268 in Belvidere, Ill. “I would also like to see the tier-two wages bumped up to tier-one.”

To a large degree, the UAW’s leadership has already embraced those goals. One of the themes at the two-day convention was conveyed with signs reading “Bridging the gap,” a reference to the pay difference between entry-level workers at the Detroit Three and workers hired before 2008.

Under the current contract, an autoworker hired today by GM, Ford or Chrysler would start at $15.78 per hour and would earn $19.28 per hour after four years. But workers hired before 2008 earn on average $28 per hour.

The second-tier wage, approved by UAW members during the 2007 contract, was adopted by many UAW members as a temporary way to help the Detroit Three survive a financial crisis.

But eight years later, about 28 percent, or 39,500, of the 137,300 hourly workers at the Detroit Three now make the lower wage and UAW members worry that the two-tier structure is becoming more entrenched.

Labor experts say the UAW stands a good chance of convincing the Detroit Three to provide entry-level workers with a pay increase this year.

But a number of UAW delegates on Tuesday in Detroit made it clear that merely closing the gap isn’t good enough.

“I think we need to aggressively attack the tiered wage system and it needs to be eliminated in this round of bargaining,” said Scott Houldisean, a delegate from UAW Local 551 in Chicago.

After five straight years of increasing industry sales, autoworkers also believe the union should return to its principle of equal pay for equal work.

“We need to not only bridge the gap, but to eliminate the gap,” said Mark Monroe, another delegate.

And Bill Parker, a member of UAW Local 1700, tried – but failed — to convince the 900 or so delegates assembled to pass a resolution that would have formally committed the UAW to eliminating the two-tier wage structure.

“Ending the two-tier wage and benefit relationship is something that we the delegates want to make abundantly clear coming out of this convention,” Parker said. “Not as one of many things that have to be corrected, but as the issue that needs to be corrected.”

Several delegates at the UAW’s convention criticized the executive compensation of Sergio Marchionne, CEO of Fiat Chrysler Automobiles, who earned more than $38 million in 2014.

UAW President Dennis Williams, who is expected to deliver a full speech on Wednesday, picked up on the broader theme of excessive CEO compensation.

“The way I view it, when we say ‘bridge the gap,’ we are talking about bridging the gap … between the worker and the CEO — not just the workers on the floor,” Williams said.

UAW Vice President Jimmy Settles reminded delegates attending the convention how far the UAW has come since 2007 and 2011 — the last time the union renegotiated its four-year contracts with the automakers.

Since 2010, Settles said, Ford has added more than 16,000 jobs.

“For the first time since the 1930s, I am proud to say Ford has more full-time workers than General Motors,” said Settles, adding 82 percent of North American workers are in the U.S.

There are 52,000 Ford hourly workers this year, compared with 36,000 in 2011, said Settles, head of the Ford division. Many of them were the result of Ford investing in plants and adding shifts, and some are the result of in-sourcing work to the U.S. that had previously been done elsewhere.

Ford pledged to invest $6.2 billion but has actually spent $8 billion over four years, Settles said. The union negotiated the addition of 12,000 jobs. The number now exceeds 14,000.

This year, Settles said well-paid jobs is the simple and highest priority that the Ford UAW negotiating team has as it negotiates a new national agreement to replace the four-year pact that expires in September.

Bernie Ricke, president of Local 600, which includes workers at the Dearborn Truck Plant in Dearborn, Mich., will chair the Ford bargaining committee this year.

UAW leaders know that exceeding expectations will be even more difficult at a time when Ford, GM and FCA US (formerly Chrysler) are much healthier than they were heading into the 2011 talks.

Settles also said the UAW has no interest in a third and even lower tier, an idea floating around the convention after a Bloomberg story suggesting the automakers were exploring the idea.

Ricke said it has not come up at all in talks with the company and today is the first he heard of the idea.

What Ricke would like to see is more in-sourced work as well.

Since 2011, Ford has added 1,400 jobs at the Flat Rock, Mich., plant to bring some Fusion assembly work in from Mexico; 450 jobs at Cleveland Engine for work done in Spain; 60 jobs at the Rawsonville, Mich., transmission pump plant for work moved from China; 3,030 jobs from Turkey to make the Transit Connect van in Kansas City; and 200 jobs at Ohio Assembly from Mexican Transit van production. In all, 3,361 jobs were added by bringing work in-house.

This article appeared in print in the March 25th, 2015 edition of Hamodia.