After Fiat-Chrysler workers rejected a contract they viewed as inadequate and forced more concessions from the weakest of the Detroit Three automakers, expectations ran high for what workers at the stronger companies — Ford and General Motors — would be able to achieve on top of that. Now, contract details for GM show that the United Auto Workers got at least as good a deal.
Here are the headline numbers: After nearly a decade without raises for experienced workers, the tentative agreement for two 3-percent base wage hikes over the course of four years, topping out at about $42 an hour for the most senior. They also get two 4-percent lump sum payments, and the same profit-sharing formula as before — $1,000 per billion dollars the company makes — that has put thousands of dollars in workers' pockets over the past few years as GM has returned to health.
If that weren't rich enough for workers' appetites, there's an $8,000 signing bonus to sweeten the deal. The Fiat-Chrysler workers won the same percentage wage increases, but a signing bonus of $4,000.
Over time, the proposal also promises to rectify what workers have seen as a grave injustice: The two-tiered wage system, under which new hires were paid as little as half what longer-term employees were making right next to them on the assembly line. Over the course of eight years, those workers — who amount to 20 percent of GM's unionized workforce, or about 10,000 employees — will gradually be raised up to the traditional rate. They'll also get the same robust health-care benefits as everyone else.
Importantly, the contract also maintains the moratorium on outsourcing work, preventing a further slide toward the use of temporary employees that has made auto work a low-wage job at the Detroit Three's competitors in the South. Those eligible for retirement will receive a $60,000 bonus. And workers won back some comforts that they gave up when the automakers were in crisis, like double time on Sunday and the day after Easter off. As the New York Times editorial board noted, those kinds of wins demonstrate the power of a union to demand a meaningful chunk of rising corporate prosperity, which only a small percentage of workers now enjoy.
Of course, it doesn't quite return the workforce to the levels of pay and benefits they enjoyed before the three companies were restructured during the financial crisis. Generous compensation for union members had been part of what put the Detroit automakers at a competitive disadvantage relative to foreign rivals that had set up shop in non-union states. Over the past decade, the United Auto Workers' concessions have brought labor costs much closer to companies like Toyota and Honda, helping to slow the American companies' long decline in market share.
Here's what that looks like, according to the invaluable Center for Automotive Research:
The UAW knows it has to maintain that level of competitiveness, or it won't have companies to work for in the future. "The biggest challenge for your bargaining committee was to balance the competing demands of higher wages and job security," the bargaining committee wrote to members in its contract summary. The contract does outline billions of dollars of investment in U.S. plants. But neither General Motors nor the other Detroit automakers are building new facilities in America — all of those are going to Mexico, which offers decent quality at about a quarter of the rate. That's partly why, even as U.S. employment has risen slightly from its recessionary low, it's nowhere near on track to return to its high in the 1980s.
After being passed by the bargaining committee, the contract now goes to workers at individual plants for ratification. If they vote to approve it, the UAW will turn to its third and final company: Ford. The strongest of the Detroit Three, Ford just announced its most profitable quarter ever, with the return of brisk sales of its high-margin trucks. That puts the union in a strong bargaining position to push for its best gains yet.