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Vol. 74/No. 40      October 25, 2010

GM to begin cutting wages by
half at auto plant in Michigan
(front page)
In its drive against members of the United Auto Workers (UAW) union, General Motors is slashing wages at its factory in Orion Township, Michigan.

The agreement, which was approved by UAW officials October 3, calls for paying 60 percent of the plant’s 1,550 workers their current wage of about $28 an hour and the rest of UAW members—some with many years at the plant, as well as new hires—$14 an hour.

Eleven hundred workers are currently laid off at the Orion plant. As workers are called back, some will come back at their full wages, while others doing the same kind of work will be paid half the wages. Union members didn’t get a chance to vote on the agreement, reported the Detroit Free Press.

With labor costs drastically reduced, GM will move ahead on production of its Chevrolet subcompact “small car” as well as the 2012 Buick Verano compact sedan at Orion. Up to now its subcompact models have been produced at its plant in South Korea.

Pointing to the bankruptcies of GM and Chrysler last year, UAW assistant director Garry Bernath said the union had to make “very difficult decisions” to prevent the company from eliminating jobs. “During this crisis,” he told the New York Times, “the UAW developed a new understanding of the realities in the 21st-century global auto industry.”

This latest concession comes prior to contract talks with the Big Three—GM, Ford, and Chrysler—which are set to open next year. Both the union and the company insist the Orion contract will not set a precedent.

GM first succeeded in getting the union to accept a two-tier wage structure in 2007 when hourly pay for new hires was cut to $14 an hour.

As GM filed for bankruptcy in 2009, the union accepted further cuts, including the suspension of cost-of-living increases, bonuses, and some holiday pay, along with a strike ban over the next six years. In 2007 GM got out of paying health-care costs for half a million retirees by transferring responsibility to a trust fund run by the union. These concessions further weaken the union, creating new divisions within the workforce

The contract at the Orion Township plant comes a week after union workers at a GM stamping plant in Indianapolis defeated a proposed contract that would have cut unskilled workers’ wages almost in half.
Related articles:
On the Picket Line  
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