In yesterday’s coverage of the new UAW-GM contract, I wrote
What’s not yet clear is whether entry-level “Tier Two” workers, who make half what their “Tier One” brothers make, got a raise. Though it’s clear that GM and the UAW worked to avoid major increases to fixed costs by concentrating on jobs and profit-sharing bonus checks, the NYT confirms that the union was asking for some kind of entry-level raise. Given that no outlet is confirming any such Tier Two raise, though, it seems as though the UAW’s culture of seniority-over-solidarity has won out.
I was wrong. The Detroit News‘s Christina Rogers reports that GM will
give entry-level workers a $2-$3 an hour increase. Those so-called tier two employees, who are paid $14-$16 an hour, will be boosted to $16-$19 an hour.
Good for you, UAW. Thank you for proving me wrong. But the sooner the union shares the burden of the “new normal” equally across its entire membership, the better. This is a step in the right direction, but as long as some brothers are more equal than others, it’s going to be tough to talk transplant workers into what still amounts to a seniority pyramid scheme.
Ed…I think you are missing the point here of the two tier system.
It is/was an attempt to lower cost and not reduce employees.
It was agreed that THIS was the route to go.
To take this agreement away and now demand equal pay is, to me, reneging on the original spirit of the deal…to save jobs.
This is like the government asking for tax increases now and the “promise” of spending reductions to come later.
OK…we agree, the tax increases come…but then the spending reductions never come and, in the end…it was a con game.
So, ok then…equal out the salaries…but then cut the number of employees.
If not, the negotiators were conning and a con was played.
TT, agree with your assessment of not reducing employees. In essence, by driving GM and Chrysler into bankruptcy with their collective bargaining demands, the UAW had effectively bargained many of their members out of a job.
The two-tier system was as close as they could get to admitting they had screwed up, hoping to hold on to some jobs until the times got better.
I don’t envy anyone for trying to get the most money and benefits in exchange for the time they spend at work, but my main concern is getting all that tax payer money back from GM. I don’t think we’ll ever see that happen.
If GM were to pay back all the bail out money they received, with interest, I’m certain that a lot of people would change their mind about buying GM again, and would change GM’s fortunes for the better.
As it is, I see GM and the UAW doing the same old dance they did before the death of GM and its miraculous taxpayer-funded resurrection. More of the same, nothing has changed. But this time the tax payer was left holding the bag.
If GM wants to make money, move production to Mexico! It worked for them in the past, and will again in the future. Spring Hill failed; it will fail again. Doing the same thing over and over and expecting different results.
Increasing pay for the lower of the two-tiers is not going to alter the lack of sales GM needs to have to pay back the bail out money and be profitable.
GM and Chrysler went BK because they had weak product, no pricing power, and no cash cushion; Ford was nearly as bad, but it had a borrowed nest egg.
GM and Chrysler went BK because they had weak product, no pricing power, and no cash cushion; Ford was nearly as bad, but it had a borrowed nest egg.
Your assessment lacks the emotional fulfillment provided by the anti-labor diatribes around here. But at least it’s accurate.
@Robert Walter @ PCH 101…. Its good to know that somebody understands the situation.
@HDC: Your post had a lot of errors, most of which have been hashed out before, but two in particular really jumped out at me this time:
“I’m certain that a lot of people would change their mind about buying GM again”
There are more people buying GM cars now then immediately before the bailout, significantly more if you consider the change in fleet mix. So where, pray tell, are all these phantom buyers who will “never purchase GM again” because of the bailout? I’ll answer for you: they don’t exist. Everyone who has repeated this sentiment already A. Didn’t buy GM products in the first place or B. Didn’t buy new cars at all. It’s nothing more than a convenient myth for the denialist crowd.
“Spring Hill failed; it will fail again.”
You have no grounds for saying that, because Spring Hill never “failed” in the first place. It was GM corporate’s decision, rightly or wrongly, to pull the plug on Saturn, and the onus of that decision rests with management. It had nothing to do with an inadequacy of the Spring Hill plant, which is still considered to be one of GM’s best plants. Once again, you flush the facts down the toilet in the race to pile blame on the UAW.
My folks have purchased 3 conversion vans, a safari, a suburban, a Denali, a solstice, a Saab and an equinox in my 26 year life. Their next vehicle will be a BMW x series built in South Carolina.
PintoFan: You have no grounds for saying that, because Spring Hill never “failed” in the first place. It was GM corporate’s decision, rightly or wrongly, to pull the plug on Saturn, and the onus of that decision rests with management.
Sorry, but that’s wrong. Spring Hill was supposed to usher in a new era in labor relations and prove that GM could build vehicles equal to those from Honda and Toyota. It ultimately failed miserably on both counts.
After the first blush of excitement, both the union and GM management couldn’t wait to kill Saturn’s unique labor agreement. The plant didn’t usher in a new era for GM-UAW labor relations that set the pattern for the rest of GM. It operated under a standard UAW contract when it was shut down, and no one considered that contract to be exceptionally unique or innovative.
The vehicles built by that plant never came close to equalling the superior vehicles from Honda and Toyota, except in the deluded dreams of GM fanboys and domestic car owners who had never driven anything better. Unless someone is going to claim that the Saturn S-Series and Ion were equal to the contemporary Honda Civic, which, if nothing else, should provide today’s laughs.
PintoFan, the people who took part in the mass exodus away from GM products over the past 30 years to flock to the imports and transplants are the people you say do not exist. The people buying GM today are loyalists, fans, UAW-members and a new crop who desperately want to believe in GM.
Geeber, you ripped the words right from under my fingertips as they descended on my keyboard. Thank you. Goes to show, here is an excellent example of different interpretation by different people of the same facts. Amazing!
While people are each entitled to their say, there is an alarming number who all use the same UAW tactics to defend the indefensible and promote the propaganda of the UAW, GM and Chrysler. It is as if the demise of GM and Chrysler never happened, all presented to us in structured criticisms to advance their agenda.
And for the record, I’m not anti-labor. I grew up in a union household. I am anti-failure. And GM and Chrysler failed. The taxpayers bailed them out. The tax payers lost a lot of money and will lose a lot more before the US auto industry settles itself. No amount of sweet talking the UAW, GM or Chrysler is going to change any of that, no matter how you interpret the facts.
What we have to look forward to is that the UAW has taken a lot of money out of their kitty to use in their battle to lobby Congress to take away the secret vote at the transplants so that the UAW can unionize them all. That’s the only way the UAW can get back up to that magic $75/hour in pay and benefits for their members.
This may surprise some of the UAW shills, but I am FOR giving each employee of the transplants a SECRET VOTE to decide for themselves if they want to unionize or not. I am confident that if they are given freedom of choice, they will vote to NOT unionize, based on what the UAW did to Detroit and its current repercussions for the US auto industry.
Keep in mind that when the UAW was in its heyday, and the domestic manufacturers were cranking out rolling piles of junk, people voted with their wallets and their feet, and flocked to the (foreign) competitors. No doubt SOME here would dispute that, but alas, it is fact and part of automotive history.
Whether anyone agrees with my assessment of the industry is irrelevant because we each must act based on our interpretation of the facts as we have them. If GM is successful in its turn-around, maybe the taxpayers will see some of that bail-out money back. If not, then nothing has changed in the forecasts by the analysts.
Giving the lower tier a pay raise is a nice gesture, for them, but it does not solve anything. What would help GM is to move more production to Mexico and China, and send the profits home.
GM is in no position to raise the prices on their product significantly because buyers will just flock to their competitors, again. So tell the UAW to go lightly.
The two tier pay system:
Such a naked exploitation of the young, in order to keep the old feeding widely at the through.
Gotta love that intergenerational wealth transfer.
Kind of reminds me of the Social Security scheme.
Just like the recent budget deficits.
as long as some brothers are more equal than others, it’s going to be tough to talk transplant workers into what still amounts to a seniority pyramid scheme.
I don’t see how slashing the pay of the “tier one” workers by 50% would entice anyone to join a union.
Incidentally, $19/hr is $2/hr below the national average wage. But I suppose that some of the readership won’t be content unless these workers make $2/hr + tips, without any health insurance.
2 bucks an hour plus tips is quite generous for repetitive movements.
“…Incidentally, $19/hr is $2/hr below the national average wage. But I suppose that some of the readership won’t be content unless these workers make $2/hr + tips, without any health insurance.”
I’d love them to make whatever they can negotiate…WITHOUT any of my darned tax dollars doing it.
GM can shove it…their accounting is right out of Bawney Fwank’s basement, and their engineering is right out of Mr John’s school of advanced hobbyshop.
I’ll stick with Germany and Japan, thank you.
I’d love them to make whatever they can negotiate…WITHOUT any of my darned tax dollars doing it.
Forgive my cynicism, but I have trouble believing that. Judging from your commentary here, I’m reasonably sure that you’d like the UAW to implode, by whatever means.
It’s pretty hilarious that you would slam GM’s engineering department in one sentence and then imply that German cars are better designed in the next. I guess you must form your opinions based on a straight reading of Volkswagen glossy brochures.
Tier ll is still below the transplant(foreign plants) and guarantees a union due. Win-win for UAW.
um…but this is my original point about the con with such statistics.
Isn’t tier 1 way above the imports/implants?
So…IF you go about trying to use play with numbers…this is what you do…you kind of not mention the whole picture.
My point is you can’t start a game with agreed rules, even get taxpayers to put money into the pot…then start frigging with the rules.
It is a con…plain and simple.
Look…I love a good con…but get kind of pissed when those playing it are caught and act sanctimonious or point and accuse me of wrong doing.
The two-tier system isn’t ideal, but I don’t think that it’s permanent. Give it 5 years, and we will probably see a reversal to a single-tier system- albeit with pay cuts for the upper level. A lot of it depends on the UAW’s ability to unionize transplant factories. When Spring Hill is reinstated, I doubt that Volkswagen will be able to hold out for long. A good deal for the UAW will only strengthen their position against the transplants.
I’m sure that the VW plant will only hold out as long as the Toyota plants, Honda plants, Hyundai plants and Nissan plants.
In other words, I’m not holding my breath waiting for it to become a unionized plant. The bitter truth is that the UAW has little, if anything, to offer transplant workers, except for the possibility of paying union dues.
The bitter truth is that the UAW has little, if anything, to offer transplant workers, except for the possibility of paying union dues.
That’s right. The product that the UAW has to sell doesn’t offer a compelling value proposition to those who don’t work for one of the Detroit 3.
If the UAW can’t improve workplace conditions, wages and benefits, then its serves no purpose. And because its labor contracts are public information, it isn’t tough for the other automakers to keep them at bay.
The UAW’s problem is that it was born battling the icy, aloof Alfred P. Sloan of GM and the vicious Harry Bennet of Ford. They truly viewed the worker as little more than machines that could be easily replaced. The management teams of Honda, Hyundai, Nissan and Toyota aren’t going to be that stupid.
@ PintoFan.. I agree with you to a point. However,getting the transplants on board,it all depends on how well the transplants treat thier workforce.
As it stands today, there is no incentive for the transplant workforce to vote union. Though that can, and will change.
mikey, the transplant workers are getting the benefit of union representation without the baggage of actually being a member. Those transplants keep wage packages good enough to keep their workforce satisfied. That keeps the union out. Should the union fail to be viable, the wages at the transplants will at best stagnate.
@golden2husky….Your right,and up to this point the tranplants have done that job well.
This, my friend, is pure nonsense.
There is nothing that can be proven in what you say.
This is similar to they spin today with the initial forced “investment” into the economy by Obama.
We were promised there would NOT be a further increase in unemployment.
However, if we did NOT do the spend, unemployment would reach above 8 percent.
Really????
Ooops!
But we cannot prove they are wrong. This just a “faith” statement. We are stuck, reduced to muttering to ourselves about never being conned again.
But here it does come again, right?
Today, with unemployment reaching numbers much higher than before the theft, all they say now is how much worse it would have been without the deal.
Wait…what?
Statements and positions such as this cannot be directly agued with because they are speculation. They cannot be proven or disproven.
Ditto with the union/non-union relationship.
You can also say that without the unions, the auto industry would be far more successful and competitive today. Many businesses are non union, never have been, yet are successful.
This is another statement that cannot be proven, but equally as far out of reach of examination as yours.
golden2husky: mikey, the transplant workers are getting the benefit of union representation without the baggage of actually being a member. Those transplants keep wage packages good enough to keep their workforce satisfied.
The transplant operations keep the union away by operating under a different set of assumptions. The union was born during a time when the American automobile industry followed the rules set down by Henry Ford I – the supervisor was the aboslute boss; management ran the company as it saw fit (at Ford, management was Henry Ford I; at GM, it was the executive team); the worker was not paid to think; workers would slack off unless management’s boot heel was kept on their colletive necks, hence the need for strict supervision; and the goal was always more production, which meant that the line moved as fast as possible.
Under those circumstances, it’s no wonder that the union came into being, and that the us-versus-them mentality became a standard part of “Detroit” culture.
The problem for the UAW is that transplants operate differently. The worker is treated as an adult, but at the same time, expected to use initiative and find ways to improve quality and productivity.
The job classification system initially developed by Henry Ford I and now zealously defended by the union has been largely discared.
Ironically, for all of the wailing about UAW members being overpaid, I doubt that the transplants would set pay at different rates. Which suggests that the UAW members are NOT overpaid, but also suggests that it’s not just comparable wage rates keeping the union at bay. The challenge is more subtle – namely, the worker is expected to take initiative and find ways to improve the processes, which will ultimately improve the product. Workers are given both more freedom and more responsibility.
The UAW has never truly faced this. But then, neither have the domestics.
The union was born during a time when the American automobile industry followed the rules set down by Henry Ford I – the supervisor was the aboslute boss; management ran the company as it saw fit (at Ford, management was Henry Ford I; at GM, it was the executive team); the worker was not paid to think; workers would slack off unless management’s boot heel was kept on their colletive necks, hence the need for strict supervision; and the goal was always more production, which meant that the line moved as fast as possible.
Very good post, Geeber. This provides a good summary of the background. The labor-management schism was created by management…but then labor incorporated that combativeness and disdain into a part of its own business model. Both sides were too concerned about pointing fingers at each other to put the priority where it belongs — on the customer.
The problem for the UAW is that transplants operate differently. The worker is treated as an adult, but at the same time, expected to use initiative and find ways to improve quality and productivity.
This is the difference between the lean production methods pioneered by Toyota and the mass production system that was invented by Ford and imitated by the rest of Detroit (and, for that matter, by just about everyone else.)
Contrary to the beliefs of the Detroit boosters, the transplants haven’t built cars in the same way, and the results were different because of it. Toyota has built better cars because they used an entirely different process for building them. But as others finally adapt to the lean production model, it gets harder for TMC to use this as a competitive advantage.
Thank you, Pch101.
I remember reading that Toyota wasn’t worried about the competition adopting its techniques, because competitors viewed it mainly as a method to cut costs, not as way of organizing the company from the factory floor to the executive suite.
Of the Detroit Three, I believe that Ford is the one that most “gets it,” and even Ford isn’t quite there yet.
Toyota wasn’t worried about the competition adopting its techniques, because competitors viewed it mainly as a method to cut costs, not as way of organizing the company from the factory floor to the executive suite.
I’m not sure whether TMC was concerned, but yes, Detroit didn’t understand that lean production doesn’t just involve scrapping job classifications for labor. It also involves creating a leaner management system, with less top-down authority. That is the sort of power that Detroit white-collar managers never wanted to give up, particularly GM with its engrained non-invented-here mentality.
Of the Detroit Three, I believe that Ford is the one that most “gets it,” and even Ford isn’t quite there yet.
Ford began to adapt aspects of lean production during the 80s, but then only partially. It has taken them more than two decades to get this far with it.
I’m sure the work environment in plants with both tiers is Kumbaya kosher. It’s gotta be a joy to manage the plant floor, too.
For comparison purposes, does anyone know the approximate breakdown of the wage structure in transplant factories? From what I understand, there’s about 6 job descriptions from general line workers (in the low $20/hour range) to skilled trades (at over $40/hour – better than their UAW counterparts).