GM Wants Two-Tier Wage System in Return for Partial Job Guarantees
General Motors on Wednesday proposed that the United Auto Workers accept a controversial two-tier wage system that would pay union workers in GM’s import-sensitive parts operations less than those working in the company’s assembly plants.
GM’s proposal also called for a freeze in base wages for hourly workers and the possible elimination of future cost-of-living increases. Instead, workers would get bonus payments tied to the productivity of the plants where they work.
In return, GM offered a measure of job security. It said it would not transfer any further work to outside or overseas companies during the first year.
But that moratorium would continue for the last two years of the three-year contract only at plants that meet agreed-upon productivity targets set by joint management-union committees. Those factories that continually failed to meet their targets would become candidates for closure, according to Alfred S. Warren Jr., GM’s chief negotiator.
Warren cautioned that Wednesday’s proposal was only in the form of a broad outline, adding that details could be worked out with union bargainers. The proposal “is conceptual in nature,” he said. “This proposal was designed to provide a framework . . . for further discussions.”
While UAW bargainers said they would listen to further GM presentations on the proposal, they rejected it as lacking the basis for a settlement.
Union bargainers noted that, throughout its modern history, the UAW has demanded and won uniform nationwide wages for workers at the major auto makers and will oppose any efforts by GM to create new wage differentials between workers in assembly plants and those in auto-parts plants. At the same time, Donald Ephlin, the UAW’s chief negotiator, also warned that any attempt by GM to eliminate cost-of-living payments could lead to a strike.
GM’s proposal to drop the cost-of-living adjustment (COLA) formula brought a reminder from Ephlin that it was an issue in the union’s 1970 strike against GM, the longest nationwide strike against a major auto maker. “The last time someone tinkered with the COLA formula, it cost us here at General Motors 67 days of wages and 67 days of production,” he said.
Ephlin also dismissed the job-security provisions of the company’s proposal, arguing that they would not provide workers any protection from job losses due to declining sales. Union officials note that far more layoffs in the auto industry are due to poor sales volume than to any corporate moves to shift production offshore.
“I heard Mr. Warren say there was no volume-related job security, so really this is much ado about nothing,” said Ephlin. “As the late Clara Peller said, ‘Where’s the beef?’ When we got to that part, it came up pretty short.”
GM issued its first contract proposal about two weeks ahead of schedule because of the complexity of the crucial job-security issue, which is widely seen as the key to the negotiations.
After a wave of GM plant closings and massive layoffs, the UAW has repeatedly stressed that job protection is its top priority in this year’s contract talks with GM and Ford. The UAW’s current labor agreements at GM and Ford expire Sept. 14.
