Anti-contractor Protests Threaten Auto Labor Peace

Dec. 2, 2011
The use of lower-wage contractors in jobs once held by higher-paid union workers is rattling more nerves now that the automakers are once again posting massive profits.

Protests over the use of low-wage contractors at an assembly plant near Detroit are threatening to undermine labor peace between General Motors and the United Auto Workers union. The protests comes as Detroit's once-struggling automakers and their suppliers are expected to add 190,000 workers over the next four years to keep pace with rising demand for vehicles after decades of mass layoffs.

One of the most controversial concessions made by the UAW during Detroit's most recent downturn was to establish a two-tier system in which new hires were paid significantly lower wages and far less generous benefits. The use of even lower-wage contractors in jobs once held by higher-paid union workers is rattling more nerves now that the automakers are once again posting massive profits.

"The big issue in (the future) is going to be what happens to the so-called 'second tier' of employees," said Art Schwartz, who served as GM's lead negotiator for many years, and is now an independent labor consultant.

"I think it will remain, but I think the UAW will try to close the gap."

The union plans to set up informational pickets on behalf of workers employed by a contractor inside GM's Orion assembly plant, said Pat Sweeney, president of UAW Local 5960.

Major concessions by the union helped save the plant from a permanent shutdown as GM restructured under government-backed bankruptcy protection in 2009.

GM expanded the number of "second-tier" workers and the union opened the door for a third tier of contract workers who collect even less while working alongside GM workers.

The Orion protest centers on the lack of progress in negotiations with LINC, a contractor the union says has been dragging out negotiations to avoid increasing wages from the current rate of just $9 an hour. GM's second-tier workers earn between $16 and $19 an hour while workers who were hired before the new system was adopted earn $29 an hour.

Sweeney, who is awaiting a strike authorization from the UAW executive, said LINC ought to be able to pay its workers a better wage. "They don't need to rent a building," he told said. "They don't pay for lights but they don't want to give anybody a raise. They don't pay for any health care either."

GM spokesman Chris Lee declined to comment on the dispute.

"They keep saying there is nothing they can do," Sweeney said of GM.

LINC now has 78 employees within the recognized bargaining unit and more than 200 temporary employees who also work on stocking the assembly lines. The LINC workers say they are acutely aware they are paid far less than the GM employees who work with them inside the factory.

"We have bills, too, and Christmas is coming," said one LINC employee who asked not to be identified.

The Orion plant is considered a showplace because it is the only plant in the United States building a subcompact vehicle.

GM moved production of the subcompact Sonic from South Korea to the United States following the UAW concessions.

Copyright Agence France-Presse, 2011

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