GM's goal: All 2nd-tier pay for workers at Orion plant
General Motors eventually wants to pay all of the workers at its Orion
Township assembly plant a lower, tier-two wage so it can affordably
build small cars, such as the Buick Verano compact and Chevrolet subcompact.
The UAW and GM agreed that 40% of the workers at the Orion plant will be
paid the lower wage, which is about half of the $28 that the tier-one
workers make, in an effort to keep GM and its Orion plant viable and
competitive -- and to bring assembly work slated for overseas to the U.S.
That deal so angered union members that they plan to protest today
outside of UAW headquarters in Detroit.
But GM eventually intends to replace all the tier-one Orion workers with
lower-paid workers, Mike Dunn, chairman of the Orion local union, said
in a video Webcast on the Local 5960 Web site. GM is offering some
tier-one workers transfers out and will eventually hire only lower-paid
"We have become 'red circle,' " Dunn said. "No other tier ones will be
able to transfer into Orion."
GM spokeswoman Kim Carpenter said the new agreement with the UAW was
essential "for a business case to make small, subcompact cars at a U.S.
plant. The unique language in the Orion agreement is specific for that
plant and for small cars."
UAW agreements allow GM to use the second-tier wage in an entire
facility. The landmark agreement that allowed for the use of a two-tier
wage called for a 25% company-wide cap on lower-wage workers starting in
2015, but didn't put caps on individual plants.
Orion workers who accept offers from GM to work in Lordstown, Ohio, will
help pave the way for all the workers at the Orion plant to be paid a
lower, second-tier wage.
Many Orion workers who were laid off at the UAW's $28 first-tier wage
received letters this week offering them a first-tier job at General
Motors' Chevrolet Cruze compact car plant 250 miles away in Lordstown,
said Pat Sweeney, president of UAW Local 5960 in Orion. The Lordstown
plant has 375 assembly and stamping jobs open, Sweeney said, although he
did not know how many Orion workers were offered jobs.
Post-bankruptcy GM is seeking to fill the Orion plant entirely with
second-tier workers, according to a video Webcast by Mike Dunn, chairman
of Local 5960. A special labor agreement for Orion, some details of
which were released last week, provides for 60% of the plant's workers
to make the UAW's first-tier wage, while 40% will make about half that.
But the agreement also says no new first-tier workers can transfer into
Orion, Dunn said.
GM plans to employ 1,330 production workers at Orion, Dunn said. The
plant has about 1,600 workers on layoff waiting for production to begin
Aug. 1, including about 500 who already make the lower, second-tier wage.
Union leaders have said they're hoping for the approximately 300
eligible first-tier workers to take a retirement incentive, which might
allow all of Orion's about 800 first-tier jobs to go to workers who were
laid off at the higher wage.
First-tier workers who fall low on the seniority list can try to
transfer instead of working for half their old pay at Orion.
After all laid-off first-tier Orion workers with recall rights have been
offered chances to work at their home plant, GM will start hiring
workers at the second-tier wage -- roughly $15 an hour, Dunn said.
"The object of Orion was to become an all tier-two plant, as long as it
was small car," Dunn said in the Webcast. "This may not take place for
up to 20 years, but that is the goal."
Future negotiations could change Orion's situation, Dunn said. In
addition, Orion is expected to assemble other products in the future,
such as compact crossovers, and the current agreement is tied to
building small cars only.
Dunn reminded workers that Orion was slated to close before the union
agreed to "innovative ways to staff" a U.S. small-car plant, winning
Orion a Chevrolet subcompact, which was slated to be built overseas.
"They've got to build this car with a profit. Small cars were never
built in the U.S. with a profit," Dunn said.
Many of the workers who move to Lordstown may return to Orion someday:
Workers can retain rights to seek to come back to Orion after six months
if they accept only a $4,800 relocation bonus. Other local options may
also be available for Orion first-tier workers. Frank Moultrie, chairman
of the local union at GM's Detroit-Hamtramck plant, said his plant is
likely to add a shift in the next year to build the Chevrolet Malibu and
the Chevrolet Impala. Detroit-Hamtramck has only 60 people on layoff and
needs 900 to 1,000 people per shift.
"If that opportunity was made available, that would guarantee all tier
ones would be able to get back at their 100% wages. That would be
great," Orion's Sweeney said.
The UAW's top leadership did not respond to requests for comment.
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