US: UAW workers still expect better wages when negotiations start image

Hourly employees represented by the UAW union have found out how big will be their profit-sharing checks coming from the Detroit three automakers.

FCA US, formerly Chrysler Group, will award payments of up to $2,750 by the end of February, Ford hourly employees will be given an average of $6,900 for the performance last year and GM tops the chart with up to $9,000.

While the figures might sound good, the UAW workers hired before 2007 have been left without a base wage increase in at least eight years and the substantial profit-sharing (for GM workers at least) still leaves expectations among the more senior workers when the UAW starts negotiating a new contract in the latter part of the year. The rest of the UAW workers, hired after 2007 have a lower base wage to start with, receiving incremental updates each year. The automakers naturally prefer these incentive-based payments – such as profit-sharing or lump sums – instead of annual wage surges that would jeopardize labor cost control.

Kristin Dziczek, the Ann Arbor-based Center for Automotive Research’s chief of industry and labor group, says that when it comes to good years the industry’s profit-sharing is a major addition to the financial status of workers. On the other hand, in the more than three decades period since the United Auto Workers union agreed to the payment form, GM for example paid nothing for 12 years. On the other hand, GM managed the record figure even as last year was the hardest ever in terms of related recall costs for the company.