Revived Big 3 prep for new hiring blitz
But entry-level
workers may find taxing jobs lack storied pay, perks
CHRISTINA ROGERS
The Detroit News - May 31, 2011
Detroit's Big Three, which eliminated tens of thousands of
hourly jobs during the downturn, are gearing up for massive
factory hiring.
All
three U.S.-based automakers have recalled many laid-off workers,
replenishing ranks depleted during the recession. But more are
needed as the companies boost production to satisfy the
returning appetite for new cars and trucks.
The
hiring is good news for Michigan, and a turning point for an
industry that's been hemorrhaging jobs for a good part of the
past decade.
But
for many new hires, the work is a far cry from the high-paying,
handsomely benefited jobs that once helped set the bar for
production wages and made the auto industry the envy of U.S.
industrial workers. The jobs bank that enabled autoworkers to
continue drawing nearly all their pay while in layoff, as well
as cost-of-living increases and pay raises have been suspended.
Also, history: the generous $28 hourly wage that helped build
wealth among the middle class in Michigan and in factory towns
across America.
All
new entry-level workers from now on will start at about $14 an
hour, about half the veteran wage, and less than the average
U.S. manufacturing wage of $18.89 an hour, according to the
Bureau of Labor Statistics.
While still not bad pay, some analysts and labor officials
believe it may not be enough to encourage workers to stick with
physically demanding assembly line jobs.
"It's really hard work in the plants," said Kristin Dziczek,
director of labor and industry at the Ann Arbor-based Center for
Automotive Research.
"It's one thing to work the line for one day, but the hard part
is getting up and doing it again the next day, and the next day,
and the next day."
Numbers add up
In
the next five years, the U.S. automakers are expected to add
about 34,000 new hourly and salaried workers nationwide, helping
to bring their ranks back to near pre-recession levels,
according to a CAR study.
The
report does not break out hourly employment, but the domestic
automakers have recently announced plans to add thousands of new
manufacturing workers over the next few years.
Chrysler Group LLC started hiring new entry-level workers last
year, when it added a second shift and 1,200 employees at its
Jefferson North Assembly plant in Detroit.
The
Auburn Hills-based carmaker also plans to bring on board another
900 workers this year at Sterling Heights Assembly; the majority
will be new hires, said Chrysler spokeswoman Jodi Tinson.
Ford
Motor Co., too, will need about 1,800 to fill jobs when it adds
two shifts late this year at its assembly plant in Louisville,
Ky. Beyond that, Ford expects to add another 4,700 jobs through
2012.
With
only 400 workers left in its layoff pool, Ford expects many of
its new jobs to go to new hires. About 1,800 temporary workers
at Ford will get first preference.
General Motors Co., the largest of the U.S. automakers, is also
in hiring mode with plans to add thousands of jobs. They will
include 2,500 at Detroit-Hamtramck Assembly, where GM will build
three Chevy models around-the-clock; 750 at its truck plant in
Flint; and 600 to build a new small Cadillac at Lansing Grand
River Assembly.
Detroit-based GM plans to recall all 1,350 workers still on
layoff by September, clearing the way for new workers.
GM
isn't yet accepting applications for hourly work, and laid-off
workers will have first recall rights, followed by transfers.
"The
hiring the auto companies are going to do is certainly going to
be helpful to the economy," said Dana Johnson, a chief economist
at Comerica Bank.
"There are a lot of people that are unemployed," Johnson said,
noting the state is still suffering high unemployment at 10.2
percent in April.
"I
don't think the auto companies will have any trouble attracting
people," he added. "I suspect they'll be long lines of people
apply for those jobs."
Lower pay, benefits
Whether those new hires will see the tier-two work as a lifelong
occupation, as many did many in previous generations, is another
question.
Aside from the lower salary, benefits aren't as rich as those
offered to veteran hourly workers. And the path to move up to a
higher wage rate remains uncertain.
United Auto Workers' Vice President Joe Ashton, who represents
GM workers at negotiations, wants the entry-level wage rate
increased and more opportunities for tier-two workers to move
up. It will be an issue during contract talks this summer.
About 3 percent of GM's 48,000 hourly workers make the entry
level wage. Ford said it has no full-time tier-two workers;
Chrysler declined to break out the figure.
Ashton pointedly described the $14-an-hour pay — about $30,000 a
year in straight time — as not a middle-class wage. "We're not
looking to make plants uncompetitive, but we're looking for
people to make a decent wage," he said.
The
UAW agreed to the entry-level pay tier during contract talks in
2007, hoping to help U.S. car companies better compete with the
foreign automakers which traditionally have had lower labor
costs.
That
gap is closing, but UAW and U.S. auto executives agree that to
remain competitive, the second tier is essential. The more
tier-two workers added to the mix, the more labor costs come
down for the Big Three.
Initially, entry-level work was to go to employees performing
noncore factory work — anything off the line — but because these
jobs were considered easier, many senior level, tier-one workers
wanted them instead, analysts say.
"Now
there are people working side-by-side, doing the same job but
for different pay," Dziczek said.
The
pay disparity already is causing some resentment on the factory
floor, some hourly workers say.
"I've observed tension on both sides," said Nick Waun, 31, a
first-tier worker at GM's Lordstown, Ohio plant, who was hired
in 2007.
Waun
and other workers say they've witnessed newly hired, second-tier
workers walk off the job after only a couple of weeks.
"Some would take off during lunch," Waun said. "One guy told me
you can make the same amount at Home Depot for an easier job."
Orval Plumlee, president of Local 2209 in Indiana, which
represents workers at GM's Fort Wayne Assembly plant, also is
concerned about the lower-level pay. About 43 workers of the
plant's 3,400-employee work force are second tier.
"We're pretty close to that breaking point where we can't keep
good help," Plumlee said. "If the economy turns around, I do
expect there to be a lot of turnover."
Applicants plentiful
High
turnover can be disruptive and costly for the auto companies,
and if they find they're spending too much on retraining
replacement workers, they may be more receptive to an
entry-level pay increase, Dziczek said.
At
this point, company officials say turnover hasn't been a
problem. They say they are confident, with many people still
looking for work, they'll have little trouble filling the jobs.
"When the window is open, we're getting hundreds, if not
thousands, of applicants for these positions," said Chrysler's
Tinson.
"Yes, there'll be a certain amount (of turnover) because of the
rigors of the job, but most people are grateful to have the
opportunity."
Max
Wright, a tier-two worker at GM's assembly plant in Orion
Township, agrees.
He
recognizes the second-tier wage as a "necessary evil" to keep
the U.S. automakers competitive. He also credits it for helping
bring some small car production back to the United States from
overseas.
This
year, GM will start building two new small cars at Orion
Assembly: an all-new Buick compact, and the successor to the
Korean-built Aveo, the Chevrolet Sonic.
To
help build these cars here profitability, GM struck a unique
labor deal with the union for the plant, where 40 percent of its
workers will earn a second-tier wage.
Wright, 36, said he hasn't seen any turnover among entry-level
workers, and doesn't feel it's a concern.
"In
Michigan right now, it's difficult to find $14-$16 an hour jobs,
with full benefit packages," he said.
Sure, he'd rather be working at the first-tier wage, but "if
it's between the second-tier and no job, I'd rather have a job,"
Wright added.
crogers@detnews.com
(313) 222-2401 |