A top official with the United Auto Workers said the American union wants to eliminate the two tier wage system that pays new automotive workers a lower rate than veterans.
According to Reuters, Norwood Jewell, nominated to serve as one of three vice presidents when the union meets next June to ratify its new leaders, said the UAW wants to dump the two tier scale that pays entry level recruits slightly more than half the rate of veteran workers.
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“The international executive board hates two tiers,” he told Reuters at a General Motors plant in Flint, Michigan. Jewell is currently director of the region that includes the GM plant.
“We didn’t do two tiers because it’s a wonderful thing,” he added, saying they were a “financial unfortunate” caused by the weak industry in 2007. “We hate them. We intend to eliminate them over time.”
Reuters noted the UAW will negotiate its next labour contract with the US Detroit Three automakers in 2015. Strong profits, combined with the UAW’s distaste for two tier wages and the fact that veteran workers have not received a pay raise in a decade, point to difficult labour talks, the news agency suggested.
The American automakers have said they need the entry level wage scale to compete on labour costs with Japanese, South Korean and German automakers that have US plants.
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By GlobalDataPay of hourly workers at the entry level starts at just under US$16 an hour and rises over time to more than $19. Veteran workers are paid just more than $28 an hour.
About 16% of GM’s 51,500 hourly US employees are second-tier workers while 19% of Ford’s 46,500 hourly workers are paid at that level. About a quarter of Chrysler’s 32,000 hourly workers are entry level.
Jewell said the key to eliminating the second tier wages would be the UAW successfully ‘organising’ non-union US plants in the south.
“If we don’t organise them and bring them up to our standard, we’re never going be able to totally eliminate the second tier,” he said.
The UAW has been negotiating to organize Volkswagen’s assembly plant in Chattanooga, Tennessee, through a German-style labour council.
Asked whether the union expects to recoup some of the givebacks it made in the last round of talks in 2011 with the now-profitable US automakers, Jewell told Reuters a strong economy would help the union’s case in the next contract negotiations.
Jewell also said he expected the union’s strong relations with GM to continue even as the top US automaker transitions to a new chief executive next month.
Jewell also said any move to raise union dues would be decided by the membership at the convention next June.
The UAW is considering hiking membership fees by 25%, the first increase since 1967, as it faces dwindling membership and rising costs, sources and a union official said this month.
Jimmy Settles, UAW vice president and the top union official for workers at Ford said the increase was only in the discussion phase and no decision had been made.
The UAW has faced dwindling membership since 1979, when US automakers dominated the domestic car market and before the widespread use of robots and other manufacturing efficiencies cut the need for as many assembly line workers.
UAW membership sunk to 355,191 in 2009 at the depths of the US recession but while US auto sales have increased nearly 50% since then, union membership has risen 8%.
