UAW Sets Sights on End to 2-Tier Wage

DETROIT – The United Auto Workers ended its 36^th Constitutional Convention this week with a clear direction if not a specific agenda for next year’s negotiations with the Detroit Three.

“You didn’t hear a lot of talk about pensions or health care,” notes Harley Shaiken, a labor expert from the University of California-Berkley. “You did hear a lot of talk about the need for a raise.”

Dennis Williams, a 61-year-old former U.S. Marine who now will lead the union, makes it clear he expects to see improvement in the economic condition of union members, who union research shows have lost roughly 20% of their purchasing power over the past decade.

The union is no longer in the business of giving concessions and wants to bridge the gap between first- and second-tier workers, Williams says following his election. First-tier makes close to $29 per hour, while second-tier earns $15.78.

“You can’t buy a car on $15 per hour. You can’t put your children through college for $15 per hour and you can’t buy a house for $15 per hour,” notes one delegate during the debate over the convention’s book of resolutions.

Norwood Jewel, a former General Motors worker who now will lead the union’s Chrysler Dept. bargaining next year with Fiat Chrysler Automobiles, is more blunt.

“We hate 2-tier,” he says.

That’s a sentiment shared by Cindy Estrada, a former classroom teacher, who has pushed to eliminate second-tier wages in the auto-parts sector where she has bargained contracts with several key suppliers, including Lear and Johnson Controls.

Estrada plans to continue advocating the elimination of 2-tier wages.

The union also actively opposes the use of temporary workers, she says.

More than 40% of Chrysler’s hourly employees now are collecting second-tier wages as are more than 20% of hourly workers at GM, which has been hiring new employees as it expands production from recessionary levels. More than 20% of Ford’s hourly workers are paid second-tier wages.

The automakers credit the 2-tier system with helping them recover from the deep downturn in 2008-2009. Indeed, Fiat-Chrysler CEO Sergio Marchionne proposed last month that the industry grandfather in the first-tier workers and move to a new system of compensation that stresses profit-sharing.

The debate over a 25% increase in union dues also exposed the intense opposition to the 2-tier wage systems among union members.

“We need to have a war chest if we’re going to be serious about breaking the 2-tier system,” says Brian Schneck of UAW Local 259 in Hicksville, NY.

Other delegates suggest the union first should have addressed the 2-tier system head on before asking members for a dues increase, an issue that has divided membership. A hike was approved after a contentious debate this week.

As secretary treasurer, Williams untangled the union’s finances in the face of falling revenues and declining membership by campaigning for the dues increase and setting up a VEBA (Voluntary Employee Beneficiary Assn.) fund for retired union staffers. He brings Midwestern roots to the UAW presidency, having first joined the union in 1977 as a welder in a J.I. Case plant in Rock Island, IL.

He also brings some corporate savvy, having served on the board of directors at truck maker Navistar for seven years, as well as keen political instincts that made him an early supporter of Barack Obama when he was still a state senator in Illinois. President Obama describes Williams as a close friend.

“Our members – like most Americans – are tired of economic inequality and want to return to the equality and social justice that is the beating heart of our union,” Williams says following his election. “Our members, every man and woman, are united in their desire to build both workplaces and a country where economic equality is at the center of our lives.”

With Williams at the helm, the UAW expects to continue utilizing the alliances with unions in Europe, Latin America and East Asia. It built the relationships under predecessor Bob King.

The UAW’s foreign allies played a key role during the union’s convention, with Frank Patta, general secretary of Volkswagen’s global works council, vowing to continue its support for the UAW’s effort to organize VW’s assembly plant in Chattanooga, TN.

In a fiery speech to the convention, Patta says a campaign of fear unleashed by political opponents caused the UAW to lose its ratification bid at the VW operation by a slim 44 votes.

Bertbold Huber, the president of IG Metall, a big German metalworkers union, notes in an interview with WardsAuto that the UAW is much more open to assistance from European units than in the past.

IG Metall is fully committed to the organizing fight in Chattanooga and also hopes to see the UAW organize workers at the Mercedes-Benz plant in Vance, AL, and the BMW plant in Spartanburg, SC.

“First Chattanooga, then Mercedes-Benz and then Spartanburg,” Huber says, adding IG Metall is in the fight to organize non-union workers in the South for as long as it takes.

The UAW is returning the favor by offering assistance to Unifor, the successor to the Canadian Auto Workers union, to organize more than 7,000 Toyota employees at plants in Ontario within the next few months.

Toyota has used legal challenges to hold up the vote, but it will take place “sooner rather than later,” according to Unifor President Jerry Diaz.