GM takes lead in talks with the UAW

August 17, 2011

GM takes lead in talks with the UAW

Sources say carmaker pursuing flexible pay

/ The Detroit News

Detroit— General Motors Co. has leaped ahead of the other Detroit automakers and begun discussing the key issue of flexible compensation with the United Auto Workers, according to multiple sources close to the contract negotiations.

With less than a month left before its contract with the UAW expires, they said Ford Motor Co. and Chrysler Group LLC are still working to clear the decks of lesser issues before tackling the big ones of profit sharing and entry-level wages. So is GM, but it reportedly is eager to negotiate its own terms without reference to what the other two companies want.

GM North America President Mark Reuss hinted at as much at an industry conference in Traverse City two weeks ago.

“We’re pursuing common hourly and salary quality rewards for excellence in our negotiations,” he said, making it clear that GM wants to tie variable compensation to more than just profits.

Reaching an agreement on those metrics will take time.

GM would not comment on the specifics of the negotiations.

“We’re working with our partners and in discussion on issues that are important to our employees and the business,” GM spokeswoman Kimberly Carpenter said Tuesday. “Talks are progressing.”

The UAW had no comment.

“GM always wanted to be the lead,” said Art Schwartz, former GM negotiator and president of Labor and Economics Associates in Ann Arbor. “Companies want to control their own fate.”

One person close to the talks said the UAW has yet to make its own wage proposal.

All three Detroit automakers have made it clear that they want to reward workers with bonuses, rather than increased base wages. That would protect their competitive position if automobile sales decline. UAW President Bob King has agreed in principle that variable compensation makes more sense than adding substantially to the automakers’ fixed costs.

“It would be really shooting ourselves in the foot to do wage increases,” King told reporters earlier this month, adding that he is open to tying profit-sharing to more performance-based metrics, including quality, productivity and attendance. “All those are factors that are measurable, that could lead to different forms of variable pay.”

However, the actual terms of a bonus scheme still need to be negotiated.

Two-tier pay protested

Talks on new national agreements officially began three weeks ago. Sources say they are proceeding amicably at all three companies. There have been no late-night sessions.

“In the early stages, they work on the very tedious work of carry-over language from the previous agreement,” said labor expert Kristin Dziczek of the Center for Automotive Research.

That includes everything from the definition of an employee, to payroll schedules and compensation for jury duty. The entire text runs hundreds of pages.

“They go down every one of them and say, ‘Do we still agree on this?'” she said.

Meanwhile, union dissidents continue to organize against a new national contract. They rallied in Detroit on Saturday against the two-tier wage system that was adopted after the last round of national contract talks, in 2007.

“We’re not even getting a living wage,” said Bob Woodside, a Chrysler transport worker who was hired under the two-tier system that allows the car companies to offer lower wages and less generous benefits to new hires.

Woodside said he makes about $15 an hour and gets tired of listening to the first-tier workers who make double that amount talk about their Harley-Davidson motorcycles and vacation homes while he tries to figure out how to keep his child in college.

He had some harsh words for UAW leaders Saturday.

“They’re not representing us,” Woodside said. “They’re oppressing us.”

Several of the speakers at the rally, which was organized by the dissident group Auto Workers Caravan, called for union members to reject any contract that maintains the two-tier wage system.

Others, like Ford Rouge worker Gary Walkowicz of UAW Local 600, called for more direct action against the automakers.

“Voting ‘no’ is not going to be enough,” he said. “We have to let the company know we’re ready to take them on.”

None of the Detroit automakers seems particularly concerned by this small but vocal minority. Instead of working their factories overtime to build up inventories ahead of a possible strike — as they have during previous contract talks — some local plants have had temporary layoffs to reduce the number of cars and trucks on dealer lots.

Under terms of the 2009 government bailout of GM and Chrysler, the UAW cannot call a general strike against those companies.

Last week, regional UAW leaders met in Detroit to discuss progress on the talks. This week, leaders of Ford UAW locals met in Chicago with company representatives. Talks between the union and all three automakers are under way at their respective headquarters.

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