General Motors Corp., responding to the United Auto Workers' call for consumer protection, has asked the union to cut wages for its members by $5 an hour so it can cut prices for consumers by $1,000 a car.
UAW President Douglas A. Fraser said the GM proposal left union negotiators "disturbed, dismayed and shocked."
GM presented its demand Wednesday, one day after the union and the company announced a precedent-setting agreement to pass on any labor cost savings to consumers. Details of the GM proposal did not emerge until yesterday.
The UAW's GM and Ford Motor Co. bargaining councils have been negotiating with industry officials in Detroit this week in hopes of producing an emergency contract designed to save millions of dollars for the two companies. Both sides have set a Jan. 23 deadline for a new agreement that would replace the current three-year contract expiring Sept. 14.
Key details of the GM demand were printed yesterday in The Detroit News, which based its report on "sources" familiar with the negotiations. Union sources reached by The Washington Post confirmed the story.
"That information wasn't supposed to get out. But the arithmetic in The News article is basically correct," said a UAW official. Another source knowledgeable about the bargaining also verified the article. But he described the GM demand as an opening day bargaining ploy."
GM officials declined comment on the details of the company proposal.
GM says its UAW-member workers now earn an average hourly wage, including benefits, of $20.83. Industry officials say domestic autoworker wages in that range contribute about $550 to what they say is an $1,800 per car cost advantage Japanese automakers have over U.S. manufacturers. The union disputes those figures. But both sides agree that U.S. cars must be more cost competitive to stem the invasion of foreign cars, which now occupy about 27 percent of the domestic auto market.
According to The News, GM would knock $5 of its labor costs by:
Reducing cost-of-living allowances and suspending future increases.
Cutting vacation time by half and eliminating paid personal holidays and paid absence allowances. The company already has ordered these cuts for its non-union employes.
Reducing accident and health benefits, as well as life insurance coverage.
Reducing overtime premiums and setting new rules under which workers can qualify for overtime pay.
GM workers now receive a straight average hourly wage of $11.53. That figure goes to an average basic wage of $11.66-an-hour for assemblers, a major employment category, according to a GM spokesman. The cost-of-living allowance currently contributes $1.63 to $2.03-an-hour for assemblers to the average basic wage, the spokesman said.
Peter J. Pestillo, Ford's vice president for labor relations, said his company will make an offer to the UAW today. Pestillo declined to give details.