GM’s Clegg Says Wage Gap Just One Item of UAW Talks

ORION TWP., MI – General Motors Vice President Cathy Clegg calls the UAW’s desire to close the 2-tier wage gap at U.S. manufacturing sites one of several issues on the table as talks on a new 4-year labor contract approach.

“There are a number of issues on the table that are of concern to both parties,” Clegg tells WardsAuto after making a GM investment announcement here earlier today.

“Surely there is concern on the part of the UAW to bridge the gap, but they clearly understand, just like we do, that the best thing that provides the best security for our team members is a good agreement that is good for the business and good for our employees.”

UAW President Dennis Williams has signaled closing the wage gap, which sees entry-level workers earning $19 an hour compared with $28 for traditional ones, a top item of the talks. Brokered eight years ago, the wage structure slashed labor costs at GM, Ford and the former Chrysler to make them more competitive with transplant automakers and has been credited with the gains made by the Detroit Three since restructuring.

But the UAW claims it creates friction with management and among colleagues on the shop floor, and Williams said last week the union’s time has come to be compensated for its sacrifices over the years.

The issue is easily No.1 on the UAW’s bargaining list – at the investment announcement here, UAW Vice President Cindy Estrada underscores Williams’ remarks, talking about the need to work together as a labor group to “bridge the gap” – and if it leads to a breakdown in talks there could be a strike.

The UAW this year has the ability for the first time since 2007 to use a work stoppage as leverage.

“They do have the right to strike,” admits Clegg, who earlier this year took over the GM lead in the talks for a retiring Rex Blackwell. “We don’t have the arbitration clause in effect any longer. However, both parties are coming to this looking to come up with solutions and problem solve.

“And this may be a bit biased, but I think we have the best team on the field, between our UAW/GM department and our labor team. They have a lot of experience and we’re going to come out with a successful agreement.”

This year’s talks, which kick off July 13 with a ceremonial handshake in Detroit between Williams and GM CEO Mary Barra, will mark the second consecutive UAW national contract negotiations led by Clegg. She guided talks in 2011 and also led bargaining with the CAW, now Unifor, in 2012.

Clegg says she approaches the coming negotiations no differently than meeting with UAW leadership at other times during the span of a contract.

“We meet with these guys and talk all the time, so the approach for national bargaining won’t really be any different,” she says. “It will be a problem-solving approach for things that are good for the business and good for our employees. That’s our objective.”

Clegg also says she wants the UAW to target GM as the lead Detroit Three company in this year’s talks, but concedes, “Everybody wants to be the target.

“We’re not focused on that,” she adds. “We are focused on solving the issues.”

The investment announcement here will see GM spend $245 million to prepare the Orion facility for a yet-to-be-named product. The automaker considers it a fourth product for the plant, which presently builds the Buick Verano and Chevrolet Sonic small cars. It will add the Chevy Bolt electric vehicle in the near future.

A timetable for the fourth one has not been set. Clegg does not expand on what it might be, saying “it will be an all-new product for the plant and an all-new product for the company.”

WardsAuto forecasts the facility will add the Cadillac XT3 small luxury CUV in mid-2018 off the Global Epsilon platform.

Production of a small CUV, the industry’s hottest segment, would be welcome news to Orion, which has seen 160 layoffs so far this year. Another 100 will be laid off next month, as the U.S. market continues to favor large cars, trucks and CUVs over the smaller products the suburban Detroit plant makes.

According to WardsAuto data, sales of the Verano so far this year are down 15.6% and deliveries of the Sonic are off 28.5%.

GM says the latest investment plan for Orion would add 300 jobs and many of those workers on layoff could fill those positions.

[email protected]