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2-tier wage plan for recalled workers angers some, but move may mean profit on Aveo
The United Auto Workers and General Motors Co. have agreed to a two-tier wage structure for recalled workers at the Orion Township plant, a move that will help the automaker make a profit on the new Chevrolet Aveo going into production next year.
The agreement is specific to the Orion assembly plant, where the Aveo will be built. The UAW and GM agreed a year ago that there would be separate labor agreements for small-car plants. Details of the Orion contract were just made public to workers.
The deal affects UAW Local 5960 members and calls for paying about 60 percent of the 1,300 workers recalled to the plant the traditional tier-one wage of $28 an hour with benefits. The remaining 40 percent will get a tier-two wage of about $15 an hour; the split will be based on seniority.
GM officials confirmed terms but declined to say whether the changes would reduce costs enough to make money on the Aveo.
“GM has worked closely with the UAW to create new and innovative contractual language that will allow this facility to be flexible and lean — essential elements in this highly competitive small-carmarket segment,” said GM spokeswoman Kim Carpenter.
But UAW Local 5960 shop chairman Mike Dunn told Automotive News the wage agreement will reduce GM’s labor costs enough to make a profit on the small car. “It’s an integral part of the plan,” Dunn said.
GM rolled its last Pontiac off the assembly line in Orion Township last year and closed it to retool for smaller cars.
When it announced it would restore jobs at the plant last year, GM said the move was possible because of a recently modified agreement making it now “possible for GM to produce these size vehicles in the U.S. in a cost competitive and profitable way.”
Officials from the UAW Local 5960 couldn’t be reached for comment, but one worker at the Orion plant, Jose Facundo, said plant workers were told of the agreement Sunday.
Facundo said he and other workers were infuriated by the deal because GM workers with 11 years or less seniority have been suddenly told they are going to be paid the tier-two or $15 wage.
“It's outrageous, and we never voted on this,” said Facundo, who has 10 years of seniority.
Facundo, who was laid off last November, said about 500 of the workers being called back will have to take the tier-two wage.
“This was never discussed. This is not in our contract and, as far as we are concerned, it's illegal,” he said.
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