TUG-OF-WAR WITHIN UAW
UAW members fear a pattern of concessions that slash pay

By Chrissie Thompson, Brent Snavely and Greg Gardner
Free Press business writers
October 8, 2010 – Detroit Free Press

At General Motors' Orion Township plant, 1,184 people have more seniority than Juan Gonzales.

So when the UAW said that 40% of the plant's workers would get about half of the $28-an-hour wage that most of the other workers receive as part of a new job-saving contract, Gonzales was shocked -- and scared. Especially because members didn't get a chance to vote on the details.

"The membership was not properly and truly informed," said Gonzales, 52.

Upset union workers are citing the Orion plant, where GM announced Thursday that it will build the 2012 Buick Verano compact car, as another example of how top union leaders aren't representing their interests. Contract rejections by Ford workers last year and at a GM stamping plant in Indianapolis last week show workers aren't afraid to break with leadership.

The tug-of-war between UAW leaders and members over the issue of declining pay levels could become a flash point in next year's national contract talks with the Detroit Three.

UAW officials tout the number of jobs they're keeping in the U.S. through innovative deals. The Orion plant will have 1,550 hourly and salaried workers after GM's $145-million investment, GM said Thursday.

UAW President Bob King said he doesn't "see any more concessions in this round of bargaining." But many union members say they're worried about preserving pay.

Rank and file question leaders' priorities

Leon Chase felt the UAW betrayed him.

Chase, a worker at General Motors' Indianapolis stamping plant, supported his local union's decision not to negotiate with Illinois supplier J.D. Norman, a potential buyer of the soon-to-close plant.

So when the UAW's international leadership followed the 2007 national contract and negotiated without the workers -- settling on a contract that would cut unskilled workers' wages almost in half, to $15.50, unless they transferred -- Chase voted with the group that defeated the contract.

Indianapolis was a unique situation, but it gave autoworkers a chance to speak out against wages they say are too low to raise a family.

The plight of workers in Indianapolis, along with those at GM's Orion Township plant who face a possible pay cut or transfer, has UAW members worried about their leadership's negotiating priorities, especially before contract negotiations next year for the Detroit Three.

Though UAW President Bob King and Vice President Joe Ashton have said that securing jobs is top priority, with wages and benefits second, some feel those priorities are out of whack.

In Indianapolis, workers voted on those priorities, saying workers of all ages deserve good-paying jobs or none at all. Workers also sent another message, Chase said: Listen up.

"I've been in the UAW since 1974. I've never seen them override us," he said.

Good news comes with a catch

Still, the situations in Indianapolis and Orion Township aren't likely to translate perfectly to the rest of the union.

Indianapolis had been slated to close since 2007, when a potential buyer gave it a last-gasp chance at survival. Orion was saved from a similar end when the plant outbid factories in Janesville, Wis., and Spring Hill, Tenn., last year for the chance to build a subcompact GM had planned to import.

As announced Thursday, the plant will assemble the Chevrolet Aveo subcompact, which may undergo a name change before it launches in August, and the Buick Verano compact for the 2012 model year.

GM said the Verano will allow the plant to hire about 1,550 hourly and salaried workers.

But for some, that news was overshadowed by the union's announcement of details of a special labor agreement for the plant.

GM's plan to pay four of every 10 Orion workers at the second-tier hourly wage -- about half the first-tier starting wage of $28 -- is permitted under an agreement the union accepted last year as part of GM's restructuring. To get a second chance at life with the Aveo, the union agreed to "innovative staffing." So workers couldn't vote on the wage.

The higher-paid senior workers remain eligible to move to other GM locations at their current pay. But some of them are disappointed that they might have to drive long distances or move to make the same wage.

King told the Free Press on Wednesday that the union estimated that none of those workers would have to do that. The UAW estimates assume that all of Orion's 300 eligible workers will take an available incentive to retire. The plant has about 1,600 people on layoff waiting for Aveo production to begin, including about 500 already making the lower, second-tier wage.

Orion worker Juan Gonzales said he thinks that hope is unreasonable, considering the Michigan economy and the plant's nearly yearlong idle status.

"After being laid off, they're probably not going to want to retire," he said.

What leaders have to say

Pat Sweeney, president of Orion's Local 5960, said the union fought to get as many Orion workers at the top wage as possible. And Alicia Boler-Davis, Orion's plant manager, admitted that having 60% of the UAW workers at the top wage was the maximum the plant could have had to build the Chevrolet Aveo profitably. The solution is definitely better for UAW workers than one option GM considered, which was to use contract workers for a portion of the labor, leaving more UAW workers out of the plant.

Officials at GM and the union insist Orion's pay structure won't become a pattern -- that it's unique because of the challenge of building a subcompact car profitably in the U.S. And Mo Davison, who directs the UAW region that includes Indianapolis, said the wages J.D. Norman was offering are competitive for an independent supplier, especially since Norman has a history of increasing starting wages to the $23-an-hour range.

Still, some UAW members and local officials are a little concerned about the UAW's seeming inability to keep wages high.

They foresee problems if automakers use the Orion pay plan as a formula to save money for other factories.

"As a strong union supporter, I am very worried of what lies in the future for the rest of us, if this wage deduction goes through for them," Debbie Wilson-Dunlap, a GM worker at the company's Delta Township plant, said in an e-mail.

But Tom Thivierge, GM's executive director of labor relations, says saving money on production is more about creative manufacturing and engineering. "Just some race on wages is not the answer. It's about innovation," he said.