Tier Two Wages, Benefits, Bonuses on Table at GM-UAW Talks

AutoInformed.com

General Motors CEO Mary Barra (l to r), United Auto Workers President Dennis Williams, GM Vice President North America Manufacturing and Labor Relations Cathy Clegg and UAW Vice President GM Department Cindy Estrada shake hands at the opening of GM-UAW contract negotiations .

The photo op is easy. However, there are many tough issues to be resolved by the expiration at midnight September 14 of the current 4-year GM-UAW contract. Conciliatory talk abounded as United Auto Workers and General Motors opened 2015 contract talks Monday at the UAW GM Center for Human Resources, where negotiations on a new national agreement will be held. The Center is located between the UAW Solidarity House and GM World Headquarters in downtown Detroit but the bargaining positions are much farther apart.

“We must continue working as a team to put the customer first, protect the long-term health of the company, bolster shareholder value and strengthen job security,” “The global competition is intense, but if we continue to collaborate, there are opportunities for growth that will benefit our employees and the business,” said GM CEO Mary Barra who wants to hold down wages to stay competitive with non-unionized auto plants.

In a joint statement GM-UAW said,” We have agreed we will not negotiate through the media, but we hope the facts, background and Communications team contacts on this site ( http://www.uawgmtalks.com/product/public/us/en/uaw-gm/home.html ) are useful.”

Since the 2011 UAW GM National Agreement, GM has announced U.S. facility investments of about $12.4 billion, creating about 6,250 new jobs and providing job security for about 20,700 employees.

However, the real contentious issues involve creating more jobs and eliminating the two-tier wage structure for UAW workers that see diminished salaries and benefits compared to employees with longer time in service. So called Tier 2 workers were hired after 2007 as GM was sliding into bankruptcy. The current 2011 contract raised their hourly pay from $15.78 to $19.28. Those hired before 2007 are still making $28.50 on the line; $33 if they are in skilled trade jobs. Those workers will also be looking for a pay increase.

The Center for Auto Research estimates that with medical coverage – also a point of contention – and other benefits are added in, GM’s labor cost is $55 an hour. Ford Motor’s cost is $57 where contract talks open next week. Fiat Chrysler-UAW talks open tomorrow where hourly labor costs are $47. This is roughly at parity with the average among all offshore brand non-union plants in this country.

With annual vehicle sales tracking above 17 million, and with strong profits at the Detroit Three there could be many potholes along the road to an agreement. Moreover the no strike clauses insisted on by the Obama Administration as part of the taxpayer bailouts of GM and Chrysler no longer apply. However, UAW leaders claim they are looking for an agreement, not a costly confrontation.

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