Ford and General Motors are considering negotiating with the United Auto Workers union for the creation of a third tier of lower-paid workers in the US, news agency sources said.
The companies would be able to cut labour costs with the creation of a third tier of lower wage jobs, Bloomberg reported. However, it could prove very difficult to convince union negotiators to accept the third tier jobs because the UAW is already trying to get rid of the second tier.
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The union has asked for a pay rise for its first tier assembly workers who make US$28 an hour and second tier workers who are paid a maximum of $19.28.
Former GM negotiator Art Schwartz told Bloomberg automakers “are putting forth what they would want if they could just write a new labour agreement on their own”.
“The UAW will only listen if it means additional jobs that they didn’t already have. If you just say, ‘We want to hire people at less than Tier 2,’ it’s not going to fly,” Schwartz added.
A third tier of workers would bring outsourced work back to GM plants because these workers could do work currently done by parts suppliers.
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By GlobalDataUAW spokeswoman Sandra Davis declined to comment while GM spokeswoman Katie McBride said: “We’re committed to working with our UAW partners on solutions that will benefit employees and improve GM’s competitiveness.”
Ford spokeswoman Kristina Adamski said: “The entry level agreement has enabled Ford to in-source work, grow jobs and invest in the US. For the 2015 negotiations, we’re open to discussing many different solutions with our UAW partners that will allow us to continue to employ a competitive labour rate and add US jobs and investment.”
Kristin Dziczek, director of the Industry & Labour Group at the Center for Automotive Research, said, “With the companies showing strong profits, it would be difficult for the union membership to have employees making even less than Tier 2.”
The companies are currently holding early stage talks with the union with formal negotiations not expected to begin until July, the Bloomberg sources said.
