GM, UAW reach deal on lower-wage jobs

[Omaha Steve]

Source: The Detroit News

Sharon Terlep

General Motors Corp. and the United Auto Workers union, after nearly six months of negotiations, have struck a deal on the issue of which factory jobs will get bumped down to a lower wage rate, union and company officials said today.

A national labor deal signed last fall between the union and automaker calls for a second tier of lower-paid hourly workers at GM's U.S. factories.

New hires whose job falls into the lower tier will make about half the $28 an hour wage earned by existing workers.

The company and GM have completed negotiations over which jobs will command the lower wage, said UAW Local 31 bargaining Chairman John Melton, who was on the union's national negotiating team.

Read more: http://www.detnews.com/apps/pbcs.dll/article?AID=/20080404/AUTO01/804040442/1001

[madmom]

1. My SO has one of these so-called non core jobs and is pretty much being forced to retire.

This really sucks because of the way they are "contracting out" certain jobs to different companies who pay much lower than even the $14 an hour.

[cloudbase]

2. The worker

once again has to pay for the bad decisions of management.

[H8fascistcons]

3. Yes And.....

Also this extends to the bad decisions made by politicians, Nafta and free trade. Don't like being paid a cheap wage, tough, we will just go to China. Thank you Bill Clinton and Democrats....

[Psephos]

4. Management was dumb as a post, but so were ever-escalating union demands

Both parties forgot to look over their shoulder at who was coming behind them in a global economy.

There is no way to build competitive small cars in North America with labor costs over $50/hr and not lose money. When there's a continent full of people in Asia willing to do it for half or a fourth or a tenth of that, the business model no longer works.

[Better Believe It]

5. How Much Do You Think The Pay Of Auto Workers Should Be Cut?

So you think the solution is to pay workers five or six bucks an hour without benefits so that the U.S.owners can "compete" against the plants they have built in Latin America and Asia?

[Psephos]

6. No

You're using a loaded phrase. How much "should" they be cut implies someone should decide it by fiat. If it's up to me (and not coming out of my pocket) I say give 'em all a big raise. But the only determinant is the market itself. US workers now compete against foreign workers, and it's this competition that has changed the economics of the business.

Maybe we shouldn't build cars here anymore. US labor prices are increasingly noncompetitive, especially after figuring in the costs of benefits, not only to workers, but to their families, as well as medical coverage for retirees. How can a $60/hr US worker compete against a $30/hr Japanese, a $20/hr Korean, a $10/hr Mexican or a $10/day Chinese? We used to do it by productivity advantages, but those have mostly evaporated.

US car companies are losing billions upon billions. This is due not only to lopsided wage disadvantages and obsolete product mixes, but also because a sizable percentage of Blue America doesn't buy domestic-assembled cars. (Including a lot of DUers.) It's a style statement, you know.

I come from a GM family and live in a car town. If you think rescinding NAFTA or reinvoking Hawley-Smoot tariffs is going to cure this problem, I'd like to direct you to this article:

http://en.wikipedia.org/wiki/Maginot_line

[BearSquirrel2]

7. I don't know ...

I don't know. But I do that the UAW is fucked in the head for running strikes in these conditions. They are over a barrel and in a time when everyone else is happy to get $15/hr + benefits for unskilled labor. Jobs are not entitlements.

[muryan]

9. I had 5 family members lose their jobs in the Dayton area

as a result of these same morons.

Union Demands: Let us keep our jobs, we'll take a 30% pay cut.

GM: Lets build more SUVs and pay chinese workers a dollar an hour to do it

[Psephos]

11. I'm from a GM family and what you posted does not reflect either position accurately

The companies and the unions both deserve blame for short-sighted strategies and inability to comprehend what pressures a global economy would bring to US automaking. Foolish product mix + wage/benefits that add $2000 or more of burden to each car made here compared to foreign assemblers. The car companies have lost tens of billions of dollars and the unions have lost hundreds of thousands of members.

Now it's all about pointing fingers. Which means the game is over. I'm surprised we even make cars here anymore.

"When a wise man points at the moon, a fool looks at the finger."
-Sufi proverb

[Winterblues]

17. National Health Care is a way

American business can not compete because of Health Care costs. Every other country provides for the Health and Welfare of it's people but america. That burdon is put upon employers which makes it virtually impossible to compete. Health Care costs are escalating by leaps and bounds and the one's really going to be hurt are American workers and consumers. If Companies didn't have to provide Health Insurance they could lower prices and up pay..

[Hannah Bell]

20. The auto unions have been complicit with mgt since the 50s.

And selling lAbor out since the 70s. There were no "ever-escalating" demands, it's been give-backs for 35 years. The results: minute-mart wages, new cars too expensive to buy without credit, Chrysler 1/2 owned by the Germans...

Who's bankrolling the Chinese auto industry, eh?

[Hannah Bell]

21. Defunded pensions are next. n/t

[gear_head]

8. $28, really?, I thought it was much higher

any links to what auto workers
are really paid?

[muryan]

10. Well in the late 90's

The family members that had seniority were making around $40 an hour. They're now making $9 an hour doing the same job because most of the factories have closed down

[Omaha Steve]

12. Japanese companies make cars here with similar wages & benefits

So why can't the big three do it too?

[OhioChick]

13. Good Question, Steve.

My GM was assembled in Canada, I believe. Why then did the car "still" cost a fortune?

It's a race to the bottom.

[Psephos]

14. The answer lies in the nonwage labor costs and legacy benefits n/t

[JCMach1]

15. One reason why universal healthcare would help save America's auto industry

[OhioChick]

16. Universal Health care will

not happen anytime soon. I don't care who is in office.

[JeanGrey]

18. No, it won't - watch and see.

[JCMach1]

19. If we get enough Dems in Congress and enough big money

and corporations get behind it, it will. Important companies like GM, Ford, et al can neutralize the effects of the Pharmaceutical, Insurance, and Healthcare industries on the debate.

There is not a proper healthcare system in the States anymore. Many times I have posted about how here in the UAE (in a free market situation for health care) it is dead cheap compared to the U.S. Plus, the system makes more sense.

I will give you 1 example. Last week I had a sinus infection. I have had them many times before. Congestion, pain, and blood clots from the nose. Knowing exactly what was wrong, I went straight to the pharmacy (bypassing the doc). 60AED a little over $15 got me the box of Zithromax I needed. I believe this costs close to $100 in the states these days. If I had taken the extra time and had seen the doctor, I would have only paid 1 or 2 dollars for the prescription. The Dr. would have been 100% covered by private insurance. And let me be clear this is free market healthcare, not a universal or socialized system. In the States for my little sinus infection I would have had to go to the doctor to take the prescription and pay the $ for the deductible. Only then, could I go and get the overpriced medicine. The bill in states would likely have approached $200. Can I bang my head on the table now?