(In March 25 item, corrects bullet point and third paragraph to
show GM is adding Cruze production to existing plant, not
building new plant)
* UAW vows to "bridge the gap" between new hires, veteran
* New workers earn up to 44 pct less than "legacy" workers
* More jobs moving to Mexico, where GM is building Cruze
model Mexico to produce 26 pct of N.American autos in 6 yrs
By Bernie Woodall
DETROIT, March 25 The United Auto Workers union
on Wednesday said getting raises for workers at the Detroit
automakers will be a top priority in contract talks this summer,
but more jobs and production are shifting to U.S. plants without
unions and Mexico.
In the next six years, Mexico's auto production will rise to
more than a quarter of the North American market, according to
industry consultant IHS Inc.
Earlier this week, General Motors Co said it would
invest $350 million in an existing factory in Mexico to assemble
a new generation of compact Chevrolet Cruze sedans, although the
company said that would not affect a Lordstown, Ohio, plant that
builds the same model.
The rise of Mexico as an auto assembly hub is just one
factor working against the UAW as it launches contract talks
with Ford Motor Co, General Motors and Fiat Chrysler
Automobiles this summer. Another factor is that UAW
membership has plummeted by 75 percent since 1979 to just under
400,000 workers, although membership has risen in the last five
years as auto sales have recovered.
UAW President Dennis Williams said he wants to end a
two-tiered wage structure that has resulted in thousands of
newly hired workers earning $16 to $19 an hour, compared with
about $28 an hour that veterans earn doing essentially the same
"They got too many damn tiers now," Williams said
Wednesday. The UAW's goal, he said, "is to raise everybody up
and bridge the gap."
The union agreed to the two-tier pay and benefit structure
in 2007 as the Detroit automakers were skidding into the red.
Now, with the Detroit Three solidly profitable, union leaders
But Williams use of the term "bridge the gap" is troubling
to some UAW members.
"I want to see the complete elimination of the two-tier
language in our contract," said Scott Houldieson, who represents
workers at Ford's Chicago plant.
The careful language reflects union leaders' concern that
the Detroit automakers keep investing in UAW-represented
factories and keep those plants competitive with non-union
plants in the southern United States and Mexico.
For decades, UAW leaders have talked about the importance of
keeping labor costs at each Detroit company roughly comparable.
Today, the majority of vehicles sold in the United States
are not made by UAW members, and Asian and European automakers
are steadily expanding their non-union factories in North
"It's one, big, fat labor market. You can't have one set of
workers making $10 and another making $60 (including benefits).
Silverados from Fort Wayne and Silverados in Mexico at
completely different labor costs," said Sean McAlinden, chief
economist at the Center for Automotive Research (CAR.)
American automakers pay Mexican workers $8 to $10 per hour,
including benefits. Even among the Detroit Three, there is a
gap, according to the CAR: GM's labor costs average $58 per
hour, while Ford is at $57 per hour and FCA workers average $48.
That difference is partly because FCA has more
workers earning the lower, entry-level wage.
At non-union plants in the southern United States, average
wages are below FCA's levels. At Hyundai Motor Co's
plant in Alabama, for example, average wages are $42 an hour.
Hyundai is studying whether to expand production at its Alabama
plant to build more sport utility vehicles.
"A lot of the new jobs depended on the second tier," said
Arthur Schwartz, labor consultant and former GM labor
negotiator. "You get rid of it and you are just opening the
door" for more U.S. jobs migrating to Mexico.
(Reporting by Bernie Woodall; Editing by Joseph White and Lisa