After bailouts, new autoworkers make half as much as veterans in same plant

Dale Hunt, a worker at Chrysler's Jefferson North Plant, discusses the benefits of union membership and the challenges that face young autoworkers compared to their older coworkers.
By Peter Whoriskey
Washington Post Staff Writer
Sunday, July 25, 2010

DETROIT -- Among workers building the Jeep Grand Cherokee here, there are few obvious distinctions. Clutching lunch sacks and mini-coolers, they trudge together through the turnstiles at the plant's main gate each day to tinker with the same vehicles, along the same assembly line, performing the same tasks.

Yet they fall into distinctly unequal classes: About half make $28 an hour or more, while the rest, the recently hired, make $14.

This oddity, which could become the norm in much of the domestic U.S. auto industry, arises from the jury-rigged labor agreement that the United Auto Workers, U.S. automakers and the federal government reached during the industry's near-death experience last year.

Now the revival of the U.S. industry depends on a compromise that some on all sides quietly acknowledge is divisive, among other things, and probably cannot last.

"How would you feel if you were on the line humpin' and bumpin' all day and the guy next to you gets twice the pay? How would you feel toward that person?" asked Dale Hunt, a veteran tradesman at the plant and former president of the union local. "Of course there is going to be animosity."

What factory workers should earn became a central part of Washington's prolonged debate over the bailouts of General Motors and Chrysler, pitting the advocates of the free market against those for a "fair wage." Although cutting labor costs was viewed by many as essential to the companies' recovery, the issue was never fully resolved.

Under pressure from the federal government and the companies to reduce compensation, the United Auto Workers refused to lower the wage rate for its then-current members. But it allowed all new hires to be paid the reduced rate, along with lesser health and retirement benefits.

At this Chrysler plant in a blighted section of Detroit -- which President Obama is scheduled to visit this week-- the company is handling demand for its Jeep Grand Cherokee by hiring its largest single contingent of "second-tier" workers, the first time such hiring has unfolded in the industry on this scale. Other companies said they will make similar workforce expansions, and two-tier factories are expected to become more common as they do.

After an eight-hour shift attaching oxygen sensors, Jay Johnson, a new hire and a 33-year-old father of three, winced when asked about the pay gap.

"It's all mental," he said after a long pause. "If you think about how much the other guys are making, well, it's not going to work for you. I don't think the $28 an hour will ever come back. But growing up around here, I just know I'm blessed to have a job."

With that, Johnson was echoing the feelings of many co-workers. Several said they were content, for now, to simply collect a good, regular paycheck, regardless of whether the levels within the factory were set equitably.

Less pay? They'll take it.

Unemployment rates run over 13 percent in Detroit, and higher than that for African Americans. Many had been unemployed before recently getting hired.

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