Tiered Wages
The UAW in 2007 agreed to implement a two-tier wage system as a means of saving the automakers money by creating a lower pay scale for new hires without reducing legacy workers’ paychecks. Today, the earnings gap between an entry-level employee and a top earner is roughly $14 per hour.
In 2015, the union and Detroit 3 negotiated an eight-year grow-in period for new full-time workers to reach top wages. It was hailed at the time as a way to eventually end the tier system.
In 2019, further progress was made, as the union got the path to four years for workers hired before that point to reach top wages.
Now, the union wants to put everyone on the same scale again.
Prior to the two-tier system, it took workers three years to reach top pay. In the 1960s and 1970s, it took just 90 days
By the end of the current deal that expires Sept. 14, 2023, Stellantis says 87 percent of its full-time workforce will be making top wages. Ford says 80 percent of its workforce will be at top wages, while GM’s figure is believed to be above 70 percent.
COLA
The UAW is insistent on winning back cost-of-living adjustments, a benefit that was first bargained for at GM in 1948, and elsewhere in the 1970s but eliminated in 2009.
The union argues that COLA is a guard against inflation, which spiked the past few years, while the automakers believe it’s an unnecessary structural cost that won’t be as relevant as inflation levels moderate.
Since COLA was eliminated, UAW workers have received more generous profit sharing payments, which are flexible and provide more to workers when the companies are financially stable. In 2022, workers earned a record $12,750 at GM, a record $14,760 at Stellantis and a near-record $9,176 at Ford.
In addition, workers at all three companies have received $1,500 in bonuses each year under the current contract; Ford’s deal refers to them as “inflation bonuses.” The companies have argued that under the current profit sharing and bonus structure, workers have made more than they would have from COLA.
The union, meanwhile, argues the companies can afford to add the benefit on top of the other payouts. Prior to its elimination, workers received COLA as well as profit sharing, although the formula for the latter was less generous than it is today. And when COLA was eliminated, the companies were unprofitable, so workers did not receive any profit sharing.
Temporary Workers
The union is looking to end what it calls an “abuse” of temporary (or supplemental) workers, whom automakers use to cut costs and safeguard against absenteeism by full-time workers or to help during busy product launches.
UAW-represented temps make less than full-timers, starting at about $16 per hour instead of $18, and they receive lesser health care benefits. Still, they’re eligible for some bonuses, as well as overtime and premiums for working weekends and holidays.
In 2019, the union made some gains: At Ford, temporary workers cannot exceed 8 percent of their total workforce, or more than 10 percent at any individual plant. At Stellantis and GM, no such cap exists, but the union must approve any use of temporary workers. According to the contracts, Ford and GM must convert temporary workers to full-time status after two years, although no such timeline exists at Stellantis.
Ford says temporary workers make up 3 percent of its workforce. Temp levels at Stellantis are at roughly 12 percent, while GM ranges from 5 percent to 10 percent. GM has converted about 6,000 temps since the 2019 contract, while Stellantis has converted about 5,100. Ford has converted more than 14,100.
The union is calling for all current temporary workers to be immediately converted to full-time status as part of this year’s negotiations, as well as for pay raises and limitations to how much they can work.
