Winning raises for hourly workers is a top priority in the upcoming contract negotiations with Detroit automakers this year, United Auto Workers President Dennis Williams said Wednesday, condemning any idea of adding a third tier of lower wages for autoworkers.
"You can't keep dividing workers up and think you're going to have a quality workforce with a quality product," Williams said Wednesday at a news conference. His comments came after hundreds of union delegates in Detroit approved a resolution during a Special Bargaining Convention that will act as a strategy for contract negotiations over the next four years.
The convention is a prelude to highly anticipated contract talks with the Detroit automakers later this year. Five years of market growth and more competitive operating structures have combined to boost profitability, making companies more able to narrow pay gaps and reverse eight years without pay raises for so-called legacy workers.
On the floor of Cobo Center, union delegates pushed for stronger language that would eliminate the two-tier pay system created in 2007 instead of merely "bridging the gap." But the push fell short and was not included in the resolution that aims to raise pay for seniority workers who have lacked a pay raise for a decade; newer workers who are paid less and have fewer benefits; and temporary workers not directly employed by carmakers.
The resolution, which includes efforts to restore outsourced jobs and protect health care and retirement benefits for UAW members and retirees will be used as a foundation by the union in collective bargaining this year with the Detroit automakers, state of Michigan, John Deere and others.
Williams said no automakers have approached him or his vice presidents about adding another tier of wages. He said he learned about it when reading a Bloomberg News report earlier this week. It said General Motors Co. and Ford Motor Co. are considering a proposal for a lower-paid third tier of unskilled workers during contract negotiations that start this summer. Speaking earlier Wednesday, Williams said the union's two-tier wage structure at Detroit automakers is already more than enough.
"I think they got too many damn tiers now," Williams said to the roaring applause of hundreds of UAW delegates.
The two-tier system was the main discussion among delegates during the first day of the convention on Tuesday. Many called for elimination of the wage structure that can pay veteran autoworkers $10 or more per hour than entry-level workers receive.
Scott Houldieson, a UAW vice president with Local 551 at Ford Motor Co.'s Chicago Assembly Plant, tried to push for an amendment Wednesday to change the resolution to "eliminate the gap" between workers, but failed.
"There was a lot of good discussion and a lot of good debate," Houldieson said in an interview. "The overall resolution has some weaknesses that weren't addressed."
'Range of options'
Detroit automakers and the UAW agreed to the two-tier wage structure in 2007. Second-tier workers start at just less than $16 an hour and ultimately can earn more than $19 an hour. Those workers also have more modest benefits than legacy, or tier one, workers.
Fewer than 20 percent of GM's hourly workforce are entry-level. More than 40 percent of workers at FCA US, formerly Chrysler Group LLC, are entry-level. Ford, at 28 percent, recently maxed out and announced 544 workers moved up from the second-tier to top wage status after Ford exceeded its cap.
GM spokesman Bill Grotz would not comment directly on the Bloomberg report about a third wage tier. "As we head into bargaining, we'll look at a range of options with our UAW partners on solutions that lead to an agreement that benefits employees and improves GM's competitiveness," he said.
A GM subsidiary, GM Subsystems, has hundreds of workers at the company's battery plant in Brownstown Township, and some employees at its Orion Assembly Plant in Orion Township and in a few other locations earning less than starting two-tier wages. The company has a separate labor agreement with the UAW.
Ford spokeswoman Kristina Adamski also would not comment directly on the three-tier report.
"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 labor rate and add U.S. jobs and investment," Ford said in a statement.
Ford said the entry-level wage agreement has allowed it to in-source work, grow jobs and invest in the U.S. On Tuesday, UAW vice president Jimmy Settles said Ford has added 16,965 UAW workers since the last contract negotiations in 2011, surpassing its commitment to hire 12,000 hourly workers by 2015. It's also invested $8 billion in the U.S. after promising to invest $6.2 billion, and has in-sourced thousands of jobs from other countries.
UAW 'alive and well'
During the last round of collective bargaining agreements with the Detroit automakers in 2011, the UAW opted for the promise of jobs and annual profit-sharing checks rather than wage hikes.
Williams said the union will look at the profit-sharing formula this time around, but separately said getting raises for workers is a top priority: "We believe that all workers deserve to be recognized for the sacrifices and the work that they've done."
The union president, who received at least three standing ovations during a speech Wednesday, said the UAW is "alive and well" and encouraged members to not only rally for upcoming contract negotiations with Detroit automakers and others, but fight to rebuild the middle class.
Williams touted lifting the standard of living, increasing the minimum wage to $15 an hour — and went as far as calling on President Barack Obama to join the union and declare a war on poverty in an effort to renew the American spirit.
The UAW, Williams said, has a responsibility to set the standard for American workers as they negotiate at bargaining tables this year. Williams said the union may choose a lead company, depending on how discussions go. He expects upcoming negotiations will be "challenging," but said "we're going to do everything to succeed."
"Success to us is having companies that are competitive, companies that have great products that are focused on quality, delivery, customer satisfaction and reward their employees and our members," he said.