US: UAW faces new threats image

Losing the vote at Volkswagen’s plant in Tennessee was a crushing defeat, practically killing the aims to tap into the anti-union South, but a bigger threat now looms over the aging UAW – Michigan’s right-to-work law imposed last year.

The problem actually starts with the fact that the union will have to deal with some crucial negotiations next year with Detroit’s big three – as GM, Ford and Chrysler in all scenarios won’t give up the new two-tier wage system that made them profitable again so son after the recession.

The UAW is threatened because Michigan – the state that has the most auto employees in the US – could see the second-tier UAW workers become even more numerous, and these could start questioning the need to pay union dues, since the UAW can’t even guarantee equal terms.

Back in 2007, after years of opposition, when all crumbled around, the UAW finally agreed to allow the automakers use second-tier wages – which triggered for the first time the opportunity to profitably make smaller cars.

Now, GM has around 16% of its workforce on the so-called entry-level employees, while the figure goes up to 21% at Ford and a whopping 40% at Chrysler. For these workers, only profit-sharing payments are the same, while their hour averages $15.78 to $19.28, compared to $28 for full rate employees. The last ones also have more generous benefits, like a full pension at retirement.

Via Forbes