The United Auto Workers union sees hurdles in growing the salaries of affiliated employees at the Detroit Three, as more manufacturing capacity and jobs are relegated to US plants without unions or to Mexico.
The UAW has to satisfy the needs of its members this summer when contract talks are scheduled with General Motors, Ford and Fiat Chrysler Automobiles, as for some of the veteran workers the pays have not been raised in years. But certain factors will influence their bargaining possibilities, including the displacement of jobs towards the US South, a region traditionally against unions. And then there’s the rising threat coming from South of the border – Mexico has in recent years arose as a major automotive production and export hub, with global carmakers drawn by the low wages, strategically geographic position between the two Americas and the country’s numerous free-trading agreements. According to consultancy firm IHS Automotive, over the course of just six years, Mexico manufacturing will come to account to at least 25 percent of the North American auto market.
Mexico’s surge is just one risk factor for the UAW when negotiations are started, with UAW membership dropping an astonishing 75 percent from the 1979 peak, with just under 400,000 members. “They got too many damn tiers now,” says UAW President Dennis Williams in reference to the two-wage tier system in place since 2007. He adds the UAW’s target is to “raise everybody up and bridge the gap.” But the union leadership also needs to tread carefully, as UAW-represented plants need to be kept competitive with the South-US factories and Mexico, which are rising in importance and capacity.