Site tours next step at GM for 2-tier pay
Leaders from General Motors Corp. and the United Auto Workers union soon
will begin touring the automaker's U.S. plants to help determine which
factory jobs should be reclassified as lower-wage positions.
For months, the two sides have been negotiating details of a new
two-tier pay system they agreed to create during contract talks last
year. GM's goal is to generate big savings by clearing out thousands of
veteran workers with retirement incentives and replacing them with
lower-paid new hires. Veterans make about $28 an hour, while the new
tier of workers would make about $14 an hour.
But those changes can't happen until GM and the UAW agree on exactly
which jobs merit the lesser pay. The labor deal, ratified by the union
in October, broadly defines second-tier jobs as those considered not
core to building an automobile, while the higher pay goes to workers in
so-called core jobs.
By visiting virtually all of GM's factories, negotiators hope to get a
better understanding of factory work and exactly how plant jobs are
broken down. Labor representatives from the company and union will begin
the visits as soon as this week, according to local union leaders and
sources involved in the talks. The process is expected to last a few weeks.
"This contract is requiring a lot of discussion because we will be
jointly implementing things we haven't done before," said GM spokesman
Dan Flores, who declined to discuss the process.
GM, which lost $12 billion in 2005 and 2006, went into the 2007 contract
talks determined to get its labor costs more in line with leaner
foreign-based rivals such as Toyota Motor Corp.
Most of the savings generated from the deal won't begin until 2010 when
a union-run, company-funded trust is to assume GM's massive retiree
health care tab.
The second-tier jobs are a more immediate cost-cutting measure for the
automaker. The UAW also stands to benefit because the new hires will
mean additional members for the union's waning ranks.
As many as 56,000 of GM's 75,000 blue-collar workers could retire by
2011, and many of their replacements would fall into the lower wage
tier. Under the contract, about 16,000 jobs would be considered non-core.
A new worker hired into a lower-tier job will cost GM $25.65 in combined
wages and benefits -- less than one-third of the $78.31 the automaker
currently spends. Workers will have the opportunity to move into the
higher paying jobs as they become available.
While the labor deal gives a framework for dividing the jobs, the
process of actually defining the work is proving difficult. One
complication, for example, is that many workers perform multiple tasks
in a day, some of which may be considered core work and some that may be
non-core. The two sides also negotiate issues such as how to fill new
At the same time, GM and the UAW are negotiating retirement incentives,
trying to reach a deal on how much cash workers will get and how many
"We just want these talks to get going because we just don't know enough
details, and a lot of our members want details," said Terry Everman, a
UAW Local 599 official who represents skilled trades workers at GM's
Flint Powertrain North plant.
Workers for the most part are pleased with the extensive work
commitments the UAW received from GM as part of the deal, said UAW Local
22 President George McGregor in Detroit. He said workers at his plant
aren't concerned that the two-tier issue is still being worked out.
"There isn't much concern because we got a great contract," McGregor
said. "The overall feeling is our leadership accomplished saving plants