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GM Temp Hands Making 40% Less Than Their Co-Workers Are Fed Up

Oct. 10, 2019
One of the major sticking points in the UAW-GM strike dispute is GM's treatment of temporary workers, who have less wages, job security, and benefits than permanent employees, despite working in plants for extended periods.

Jaymi Jendon assembles parts at a General Motors Co. engine plant in Romulus, Michigan. She gets paid $18.44 an hour. All around her, co-workers earn much more -- between $28 and $32 an hour. They also get health insurance and paid vacation. She gets mini-versions of those things.

The difference: Jendon, 42, was hired as a temporary employee and, even after three years at the factory, remains one today. She had given up her job as a hair salon manager to work at GM, hoping it would quickly lead to a full-time gig.

“It was kind of preached to us that it was going to be a better lifestyle, we’d be middle class and be able to do a few things fun, take some vacations,” says Jendon. “But it’s definitely not been.”

The Jaymi Jendons used to represent a tiny minority of the unionized workers at the Detroit Three, but their ranks have swelled over the past decade to represent almost 10% of their combined, 150,000-strong workforce. GM, Ford Motor Co. and Fiat Chrysler Automobiles NV have been adding the temps -- who work when asked and can be terminated abruptly -- as part of their bid to keep labor costs contained.

The future of temps has been among the major impasses contributing to the United Auto Workers union’s strike against GM, now in its 25th day. The UAW wants to halt the trend of growing temp use, which it sees as both unjust and a threat to the union’s long term well-being. Allowing the companies to staff up on temps was among the concessions members made to help the companies weather the financial crisis that bankrupted GM and Chrysler, then recover from it.

There’s been some movement in negotiations. The parties have agreed to a path to full-time employment for temp workers after so many years, according to people familiar with the negotiations. But they’re still haggling over whether that time would be cumulative or worked consecutively. That’s an important distinction, since temp workers are the first to be laid off as production waxes and wanes.

The resolution GM and the UAW reach on temps will be a key factor in whether the rank-and-file decides to ratify agreement -- or stay on the picket lines to press for more.

No Security

Dennis Laubernds, 64, has been there. He’s been temping for GM on and off since 2013, first at a plant in Warren, Michigan, and now in Orion Township, where the electric Chevrolet Bolt is made. He was laid off in June 2017 and then re-hired in April of this year, at an hourly wage of $15.78, down from the $21 wage he had built up to in Warren.

“When I came back I had to start all over again,” said Laubernds, who was walking the picket line at GM’s Hamtramck plant on a recent Sunday morning.

Laubernds said he takes home about $423 a week, and wants a 401(k), dental and eye coverage, and more than three days of vacation a year.

Temp workers are not new to the assembly line but they were used mainly to cover for people on vacation or calling in sick. That changed after GM and Chrysler declared bankruptcy in 2009, and the UAW agreed to contract language that allowed temps to work regular production hours.

Blending lower-paid temps into the workforce has helped the Detroit Three stay competitive with foreign automakers that have factories in the U.S., like Toyota Motor Corp. and Honda Motor Co., said Arthur Schwartz, a former director of labor relations at GM who is now a consultant.

Pay Gap

But the pay gap has started to grow again, he said, pushed up in part by annual profit-sharing checks (GM paid out $10,750 this year). GM’s average hourly labor costs -- which include wages, benefits, and statutory things like workers comp insurance and payroll taxes -- is about $63. That compares with $50 an hour for international automakers in the U.S., according to Kristin Dziczek, vice president of the labor and economics group at the Center for Automotive Research.

In the face of a looming sales slowdown, the issue is especially urgent for the UAW and GM. When sales falter, car companies will first lay off temps and lower-paid workers, leaving employees with higher pay and more seniority, Dziczek said. That will lift the companies’ labor costs while sending more temp employees to the streets.

“There’s some legitimate concerns here about the life of a temp, but it’s a balancing act” for the union, Dziczek said, meaning it has to weigh helping temporary workers versus getting pay increases for existing full-time employees.

Even if layoffs are on the horizon, winning permanent employee status could soften the blow for temp workers, because they would gain rights and protections like supplementary unemployment pay and dibs on new job openings, Dziczek said. “They’d have job and income security that they don’t have now.”

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