US: two-tier salary system, a personal matter for UAW members image

The three US automakers, General Motors, Ford and FCA US have been using for years a two-tier wage system for their UAW workers, and the fight to change it to a unified strategy is expected to escalate later on this summer during the annual wage discussions.

The two classes of United Automotive Workers employees are the veteran “first-tier”, who get around $28 an hour (if we take GM as an example) and the “second-tier” workers hired after 2007, who are paid $16 to $19 an hour. The Detroit companies said the fact they had lower paid new workers has granted them the necessary freedom to recover from the aftermath of the bankruptcy procedures stemming from the Great Recession (Ford had a close call). They also said that paying less allowed them to hire thousands more in the past few years. But the Detroit Three and the UAW are reaching a climactic summer that would see new contract talks – with the issue of the two-tier wage system up front on the negotiation table.

UAW President Dennis Williams is under massive pressure from long time rank-and-file union members to somehow get rid of the classes during the negotiations this summer. The UAW has been fighting for comparable pay for comparable work for decades, but had to concede to the two-tier system back in 2007 as the Detroit Three experienced the first effects of the Great Recession. The automakers, which managed to lower the cost gap when compared to non-union auto factories run by foreign automakers in the southern United States, will naturally be reluctant to make any change.

Via Reuters