GM's goal: All 2nd-tier pay for workers at Orion plant
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 workers.
"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.