The UAW is desperate to create jobs, and reduced wages makes U.S. plants competitive with offshore facilities. Ironically, the weakest and smallest of the Detroit Three, Fiat controlled Chrysler, might be in the best position to create jobs.
The United Steelworkers (USW) announced yesterday that 1,500 represented employees ratified a new three-year contract with auto parts supplier Dana Holding Corporation. In a related development Dana said this morning it named Roger Wood as its new chief executive, effective April 18, replacing interim CEO John Devine, who will retire.
The USW and UAW began joint negotiations in Detroit in late January for 21 plants and nearly 4,000 employees. A tentative agreement was reached a few weeks ago. UAW-represented employees ratified the new “Global Framework Agreement” last week, effective June1. It is the first agreement between organized labor and Dana since the automotive parts supplier emerged from Chapter 11 bankruptcy in January 2008.
The contract has implications for the United Autoworkers Union as it enters negotiations this summer with automakers since the Dana contract reduces but does not eliminate the gap in the existing UAW and USW two-tier wage structure with Goodyear.
The UAW is fiercely divided over the two-tier wage issue, which allows new hires at $12 an hour, while veterans get $28. UAW president Bob King insists that reduced wages for new workers are necessary, while opposition groups within the union are calling for its end.
At the UAW bargaining convention last week King said that there’s no doubt entry-level workers deserve to be brought up to the same level as Tier I workers, but the UAW president cautioned that this will take time, signaling that the union will not push the issue.
Despite the slow recovery of the U.S. auto business, the UAW is facing the closing of auto plants at General Motors – Shreveport, LA; and huge complexes at Janesville, WI and Spring Hill, TN are closed on a standby basis. Ford Motor still intends to close its Twin Cities truck plant near St. Paul, MN next year.
The UAW is desperate to create jobs, and reduced wages makes U.S. plants competitive with offshore facilities. Ironically, the weakest and smallest of the Detroit Three, Fiat controlled Chrysler, might be in the best position to create jobs as Fiat plans to add numerous Fiat derived models to the line during the next four years.
However, no strike clauses in the contracts at GM and Chrysler that were imposed during their taxpayer financed bankruptcy reorganizations remain in place until 2015.
