U.S. News

GM workers protest low-wage small-car plant

DETROIT (Reuters) - About 100 General Motors Co workers and retirees picketed outside the United Auto Workers union’s headquarters on Saturday to protest plans to build a new small car with low-wage workers.

A GM sign is seen outside the Medved General Motors car dealership in Arvada, Colorado August 12, 2010. REUTERS/Rick Wilking

The protest came just days after some veteran UAW workers at the Orion plant near Detroit were told they would have to accept wages that are about half what they had been making and as GM rushes to complete preparations for a stock offering.

GM plans to employ just over 1,300 workers to build a new subcompact car for its Chevrolet brand and the Buick Verano compact at the now-shuttered Orion Township assembly plant when production begins in August.

Details of the concessions granted by the UAW’s national leaders have angered many workers.

Rick Milkie, a nine-year Orion plant veteran, said the UAW’s concession allowing GM to hire an increasing number of workers at wages of about $14 per hour was an unacceptable concession by a union credited with helping to create an industrial middle class in the years after World War Two.

“Walter Reuther is rolling in his grave,” said Milkie, who was marching outside UAW headquarters with a sign saying, “Call a Cop, I’ve Been Robbed.”

Reuther was the UAW’s long-serving president during the union’s heyday in the 1950s and 1960s.

The UAW has agreed to allow GM to run the Orion plant with 40 percent of its workers at that second-tier wage. That is about half of the nearly $29 per hour that veteran UAW-represented GM workers now make. Over time, GM plans to staff the plant entirely with workers at the lower wage level, a local union official told Orion workers.

The lower wage represents an annual wage of around $30,000, down from $58,000 under the previous contract. That compares to U.S. median household income of about $52,000 in 2009.

“The object at Orion was to become an all tier-two plant as long as it was (making) small cars,” Mike Dunn, president of UAW Local 5960 said in a webcast. “That could take 20 years.”

GM, which was restructured with $50 billion of U.S. government funding, has said it needs the lower wages to build a subcompact car at a profit in the United States.

“The unique language in the Orion agreement is specific for that plant and for small cars,” GM spokeswoman Kim Carpenter said in a statement. “We believe this collaboration with the UAW keeps good manufacturing jobs in America.”

Dunn said the UAW local leadership supports the GM contract for Orion, calling it the best deal that could be won after almost a year of negotiations.

Without the concessions and $770 million in state tax incentives, GM would have built the replacement for the Chevrolet Aveo subcompact in Korea or Mexico, Dunn said.

“They’ve got to make this car with a profit,” he said on the webcast. “Small cars were never built with a profit in the U.S.”

But protesters outside UAW headquarters said the UAW needed to find a way to roll back the concessions. The next round of regular contract talks between GM and the UAW is set for 2011.

“Next year is too late,” said Greg Clark, a GM worker who came up from Indiana to show support for Orion workers. “We’ve got to go back to the drawing board.”

GM is counting on an initial public offering of stock in November to reduce the U.S. government’s 61-percent ownership stake in the automaker.

Editing by Eric Walsh