“NO DEALS, NO WHEELS!” United Auto Workers (UAW) union members yelled while walking the picket line out front of Ford’s Michigan Assembly Plant, where The Blue Oval builds its Rangers and hot-selling Broncos. “BRING BACK C.O.L.A!” they continued. “NO CONTRACT, NO WORK!” I heard blaring from a megaphone just a few feet from where I stood. “HOW MANY TIERS WE WANT?” a worker yelled, only to be followed by a cry from the rest of the workers who had just started their noon strike-shift: “NO TIERS!” It was a gray, gloomy, temperate day, and the seriousness of the atmosphere was palpable. Thousands of workers were on strike, fighting for higher wages, an end to a “tier-system” that they feel is unfair, and much more. Here’s what it was like talking with those workers.
I’ll begin by saying that I’m really not that well-versed when it comes to labor issues like this one, nor do I view one side as good and one side as bad. To me, this is all a byproduct of a system that aims to maximize shareholder value and remain competitive with non-unionized shops like Tesla and Toyota. As a result of these goals, automakers have incentive to minimize expenses, and one consistent expense is labor. Still, like anyone negotiating a salary for a job only they can work, the UAW is coming to the bargaining table to fight against those tendencies inherent to our system. Is the UAW asking for too much, with its initial 40 percent pay increase (over four years) demand? Some people think so, while others think it’s fair given how much CEO pay has risen in a similar period. I’m not here to tell you what I think, I’m just here to tell you what I learned from union workers at Ford’s Michigan Assembly Plant.
I talked with UAW spokesperson Jim McNeil just outside of the assembly plant. He was extremely gracious, welcoming me and — despite all the yelling and cheering around us — answering my questions with patience.
He mentioned that one of the key things the Union is fighting against is the tier system. He broke it down for me:
- Tier 1: Pre-2007 full-time employees. These folks got a pension and retiree healthcare.
- Tier 2: Post-2007 full-time employees. These folks have to make do with a 401K, not a pension plan. These folks, when hired, don’t reach a top pay bracket for eight years, and could do the same work alongside a more senior peer while being paid significantly less. Most employees, McNeil told me, fall into this Tier 2 bracket, and therefore lack retirement security.
- Tier 3: “Temp” workers. They make $15.78 an hour at Stellantis and $16.20 at Ford, McNeil told me. This is too low, he believes, especially given that “temp” workers could remain “temp” for years. This type of job, McNeil told me, is not secure, and does not include profit sharing.
McNeil also pointed out that, around 2008, when both Chrysler and GM went into bankruptcy and Ford staved it off by smartly getting loans before they became impossible to get, the UAW made significant sacrifices. Now that the Big Three are doing so well financially, the UAW wants a piece of the pie.
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I later chatted with another worker, named Marlin, who said about the UAW’s strategy for securing better pay and benefits: “They got the money, but we have the power,” with “they” being automaker leadership. He said the workers aren’t asking for millions, just a living wage, which should be possible given that automakers have been raking in profits by “price-gouging” these last couple of years. Marlin also mentioned the UAW’s desire for cost-of-living adjustments (COLA), as “wages that worked a few years ago just don’t work [today].”
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There’s Shawn Fournier, a paint shop worker at Ford’s Michigan Assembly Plant, in the video above. I’d noticed him picketing right there on Michigan Avenue in front of the Bronco/Ranger plant, eliciting hundreds of loud honks from supportive drivers who passed by. He talks about Tier 1 “legacy workers,” and how it took him — an “in-progression” employee — almost a decade to reach the same pay tier as a legacy worker. The end of this system; a cost of living adjustment; and a pay hike in general, especially during this time of relative prosperity for automakers and especially after the UAW’s sacrifices during the bankruptcy era — these are what the UAW is currently fighting for.
As for their statements, here’s what Ford had to say on Thursday:
DEARBORN, Mich., Sept. 14, 2023 – At 8 p.m. this evening at Solidarity House in Detroit, the United Auto Workers presented its first substantive counterproposal to Ford a few hours from the expiration of the current four-year collective bargain agreement.
On the key economic issues that matter most to our UAW-represented employees, Ford has submitted four proposals to the UAW since Aug. 29. The last offer Ford submitted was historically generous, with large wage increases, cost of living adjustments, more paid time off, additional retirement contributions and more.
Unfortunately, the UAW’s counterproposal tonight showed little movement from the union’s initial demands submitted Aug. 3. If implemented, the proposal would more than double Ford’s current UAW-related labor costs, which are already significantly higher than the labor costs of Tesla, Toyota and other foreign-owned automakers in the United States that utilize non-union-represented labor.
The union made clear that unless we agreed to its unsustainable terms, it plans a work stoppage at 11:59 p.m. eastern. Ford has bargained in good faith in an effort to avoid a strike, which could have wide-ranging consequences for our business and the economy. It also impacts the very 57,000 UAW-Ford workers we are trying to reward with this contract. Our hourly employees would take home nearly 60% less on average with UAW strike pay than they would from working. And without vehicles in production, the profit-sharing checks that UAW workers could expect to receive early next year will also be decimated by a significant strike.
Ford remains absolutely committed to reaching an agreement that rewards our employees and protects Ford’s ability to invest in the future as we move through industry-wide transformation.
Here’s GM‘s statement from Friday:
September 15: GM Statement on UAW Strike
The UAW has informed GM that they are on strike at Wentzville Assembly in Missouri as of 11:59 p.m. on Thurs, Sept. 14. We are disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments. We will continue to bargain in good faith with the union to reach an agreement as quickly as possible for the benefit of our team members, customers, suppliers and communities across the U.S. In the meantime, our priority is the safety of our workforce.
And, while I can’t find Stellantis’s official statement on its website, here’s a statement that Reuters posted a few days ago:
“We are extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers. We immediately put the Company in contingency mode and will take all the appropriate structural decisions to protect our North American operations and the Company.”
It’s an unprecedented strike in which the UAW is simultaneously picketing all three Big Three automakers. And while the strike only affects GM’s Wentzville Colorado/Canyon mid-size truck plant, Stellantis’s Toledo, Ohio Jeep Gladiator/Wrangler plant, and Ford’s Michigan Assembly Ford Ranger/Bronco plant, the UAW could decide to strike at even more locations. And if that continues on long-term, that could be devastating for automakers and workers alike.
Hopefully, there’s a resolution soon.
Pay workers a living wage for 2023, have it somehow tied to inflation and let them decide if they want to take say, $70/hour and save for retirement or spend it all on hookers and blow.
*I have never made a “living” wage until age 46, and still have no retirement savings options* Working as a mechanic is not viable these days.
I retired 4 years ago at a non union plant and we did make GM mufflers and many other American products.We voted on union every few years and it was always close but failed. I retired at 62 with a great 401k plan and I think I was making about 27 an hour and of course I wanted more haha! Good luck to all
Paying an experienced worker $27 at 58 is a disgrace.
I’m glad your retirement is going well!
Great work David! It’s important to see the workers-side of the narrative.
I’m very happy David went to the strike and talked to the actual workers about whats going on. Most media outlets only talk to company or union spokespeople who don’t always give the complete picture. Since I’ve lived in Detroit and work in a lot of these plants for my job I’ve been following this situation pretty closely for a while. Here are some interesting numbers.
Henry Ford’s famous $5 a day minimum wage from 1914 is just above $19 an hour in today’s dollars, $3 more than the starting wage today. All new hire wages got cut in half in the 2008 bankruptcy. As you can imagine these workers are significantly more productive today than over 100 years ago.
In 1973 the average wage was $5.54 which works out to about $40 an hour today. After 8 years as a temp, when and if workers reach full time their pay is capped at $32 an hour. Many cases if a worker is transferred to another plant their time gets reset to zero which makes no sense.
GM CEO Mary Barra makes $13,800 an hour, it would take 4 years for a maxxed out temp worker to make what she makes in a day.
Last year the big 3 made $77 billion in gross profit, which would be a bonus of over $500,000 if divided among the 150,000 big 3 UAW represented workers.
Stellantis just spent about $500,000,000 in stock buybacks this month.
The days where someone could earn a good wage doing this honest work, buy a house, go on vacation, support a family, send their kids to college working 40 hours a week are long gone. Mandatory overtime with 10 hour days 6 days a week isn’t unusual. A significant percentage of this factory workforce are temp or second tier workers, who often have to work 2-3 jobs just to survive. There is also the issue of these multinational corporations moving plants to other countries and paying folks pennies on the dollar for jobs that could support a middle class income a few decades ago, which is why I hope the US workers reach out to the big 3 workers in other countries to join their fight. Those who say these demands are unreasonable are looking at the wrong half of the equation.
gross profit doesn’t mean anything
Gross profit absolutely means something. here’s a simple definition:
Gross Profit (also known as sales profit or gross income) is the profit a company has left over after paying all direct expenses related to the manufacturing and selling of its products—or, if it’s a service-based business, providing its services to customers.
I think you might be thinking of gross revenue. Gross profit is I believe is how much you’ve made before taxes and stuff get factored in which then become net profit but it already has all your operating expenses factored in.
You’re maybe thinking EBITDA, which is much less helpful. Earnings before interest, taxes, depreciation and amortization. To Ryan’s comment further down, gross profit is a real measure.
Sadly it was the oldsters in the UAW in 2007 that set up the tiers so they could actually keep their pension. they basically robbed from peter to continue to pay themselves. we all knew that was crapola deal for any new hires. The fact that they allowed so many temp workers is also amazing.
Your post is all truth
I like the boots on the ground approach, but I would really like a fulltime Detroit Autopian Correspondent
Is Detroit really so central in today’s automotive industry that it requires a full time correspondent? I’m only mildly joking
Maybe the Autopian can be the first mag with a full-time correspondent embedded at Geely HQ instead.
with all the vendors, manufacturers and also for the car culture, yeah. I think It would be worth it. Im biased because I used to live there. Im not going to lie im disappointed there was no Dream Cruise Coverage, Id like an update if the Conner Avenue Plant (Viper Factory). Did it end up becoming the museum and meeting place that would replace the Walter P Chrysler Museum. Again Im biased.
Agreed that we need to step it up.
My general take: Give them the money they are asking for. But I also believe pensions are a thing of the past. As far as retirement packages go, I don’t trust guaranteed benefit packages. Guaranteed contribution packages seem far better. Sure, these companies are doing great now, but no guarantee they will be when it comes time to retire, and no guarantee management of the pension fund will be run properly either.
Give generous 401k contributions that don’t require workers to meet minimum contribution requirements.
Pensions and really good pay went the way of the dinosaurs because of things like giant golden parachutes and multimillion dollar bonuses. CEO pay has increased by 1,322% since 1978, while regular workers pay has only increased by 18%.
There’s the problem. Corporate greed.
Eh… that’s a common talking point trope, but the CEO pay discussion is a distraction. You could take Mary Barra’s compensation down to 0 and give (checks math, and assuming we’re counting stock compensation here) every GM employee 10 cents more an hour. Net of the stock compensation, that number gets closer to about 1-2 cents/hour depending on how you like to round. It simply doesn’t make a difference.
Golden parachutes and CEO comp might be an issue if in nothing more than optics, but the burdensome costs of pensions is a separate one entirely. In 2009, the predicted needs (based on foreseen retirements and life expectancy) was 100 billion dollars for GM. You could take all of the C-Suite and senior VP compensation at GM and you wouldn’t cover even a percentage point of the pension liabilities 15 years ago, to say nothing of what they would be today.
I’m not interested in corporate shilling (I drive a Toyota, but Duramax was always my go-to diesel), but the legacy costs of pensions was always going to be an issue, irrespective of what the C-Suite makes.
That’s ignoring stock buybacks, which consume huge amounts of money and also benefit the C-suite.
Those really should be illegal again. Up until the late 70s/early 80s they were.
I do think there are legitimate purposes for them from a business standpoint. If they buy back some of the stock in good times, it is another way to invest their money to be able to have something to sell off in lean times. You can’t (without many lawsuits from shareholders) just create new stock to raise capital in other times.
That’s.. only partly true. That is, bought-back shares don’t go into a pool owned by the company that can later be re-sold. They stop existing, so each non-bought-back share is theoretically worth slightly more money. But maybe investors who have gained a lot from stock buybacks over the years are more willing to tolerate dilution from a subsequent offering.
The real golden parachute issue is CEOs can do short term fuckery to drive up stock price which triggers compensation to make them flush but actually puts the company in a much worse position going forward but they don’t have to stick around to deal with the consequences.
I just read an article in Forbes about how Yellow Freight paid out 4.6miliion in executive bonuses right before they declared bankruptcy.
I would explain nothing less
holy cow I had a stroke here
Get well soon
That is really the problem with Pensions. they are tied to one company all too much. 401 K at least is separate even though many companies automatically buy you into company funds if you don’t log in and maximize your gains every 6 months or so.
And talking point about dividing up the CEO’s pay among the workers is a common trope as well. That is not the point at all. She can make her 30mil/yr, the point is that her pay went up 40% in the last few years and theirs did not.
(I will say though that in the 1960’s CEO pay was 35X the average workers, today it is 350X. Why are CEO’s 10X more valuable today?)
If the company was performing well enough to warrant a 40% increase in executive pay, the worker pay should rise closer to that rate as well.
And the 40% increase isn’t that much considering they gave up the COLA in 2008. If they had not lost that they’d most likely close to that 40% figure already.
No mention of UAW President Gary Jones Sentenced to Prison for Embezzling Union Funds? Greed is all around.
yeah, this union is far from “perfect,” and in fact pretty shoddy…but their overall points here are correct
I see both sides. I am uniquely straddling due to my spouses union affiliation. I am more white collar.
My main issue is not so much union demands, I agree that in a world where COL has basically followed the past two years of inflation, 5 ish percent in 2021 and 8 percent in 2022, without the standard 3 percent COLA raises, the previously high paid auto workers are seeing buy power drop considerably. all the while GM for example is posting 21-22 Billion dollar profits in 2022 and again this year so far. Now I can say that the last contract netted a pretty massive payoff to get the contract ratified. at least massive to me. I would personally take the $11,000 that each one got. though it still did nothing for the massive number of temp workers being strung along for years suggesting they might one day get a decent wage and union Bennies. I also recall the employees are getting profit sharing bonuses, $12,750 last year, a record for the company, up from $10,250 in 2021. so even though that is a lump sum it would still in my book provide back some of the lost buying power due to inflation.
But on the other side, 22Billion even with 100Billion in debt owed by the company would likely not matter much if say they paid every employee 80K more. the oldsters might bitch that they deserve more, but I think the ones that have been screwed over by them in the past would probably be much more effective workers after this. I think the math on that is the company would still post 18-19 billion dollar profits.
I don’t fully disagree, but you also have to remember the average worker these days doesn’t stay at a job for 20+ years anymore. So 401ks are far more flexible as you don’t walk away with nothing if you switch to a different company after a few years. The desire the younger generations (including me in this) have to move around and not stay at one monotonous job for decades drove a shift away from traditional pensions too, or if it didn’t drive it, that’s at least a benefit in my book.
Movement between jobs is an interesting observation. Corporations have made it such that the *only* way to get real raises is to jump companies, and that’s the advice being given to new grads entering the workforce and has been for a decade at least. Lo and behold, they listened, and jump between jobs. Meanwhile, middle management and corporate HR get surprisedpikachu.jpeg and do “workplace of choice” type surveys to try and figure out why nobody stays loyal to the company anymore. The answer is right in $&@!ing front of them but upper management refuses to give them the tools to actually solve the problem, so they get pizza parties and platitudes instead.
Fair. I do not ever claim to represent anyone normal, but I really struggle without change. I abhor monotony and have honestly never changed jobs for financial reasons. I just get bored and want to move every few years. So for me the 401k construct works better because there are very few things that sound more miserable to me than having to stay at one company for 20-30 years.
Ooof, my company recently did a corporate presentation where the theme was “grow with us” about how they want people to retire from here, and they want everyone’s kids and families to work here as well.
We were a locally owned company till about 3 years ago, then we were bought out by a much larger company. They left us a lone for a while, but over the last year or so have really been trying to integrate us into their corporate bullshit.
The reaction of everyone was essentially “fuck yuooooo!”. With no clear path to advancement and across the board increases (not merit based) that do not keep up with cost of living, most people are over this place. Alot of people have been here years though, and live locally, so there’s not a lot of motivation to leave. Unfortunately, I find myself in this camp.
Oh, and as I type this, I am eating pizza that our engineering dept had as a reward for completing a hugely important project.
The reward of being at a company longer to see new hires below you get paid more than you is really something.
As I recall, the 401K systems have a tenure or timeframe when the 401K can stay with a person, in my first job out of college I was there just under 2 years, but they forced me to transfer or cash out the 401K money I had built up, meager that is was.
it’s called ” vesting ” and it’s base on a sliding scale of service time . It may be a federal government thing that individual companies have no control over …
Definitely not a government thing, except that the government sets a 6-year max for full vesting. The last couple places I’ve worked did immediate vesting for employer contribution, and at any company the employee contribution is always immediately vested.
Two different concepts at play here.
One, if your account value is $5,000 or less, the plan provider can require you either transfer the money to an IRA, another 401k, or cash it out. From a tax-advantaged perspective, there’s no real difference. Companies were offered incentives (easy safe harbor provisions, among others) to have opt-out, rather than opt-in, plans; this meant that a lot of people who only worked a year or two might only have a few hundred bucks in their 401k (and might not have even known about it, if they blew through the HR paperwork). So the money’s yours, it just can’t stay with the plan provider (like Fidelity).
Alternately, there is – as others have described – vesting. Vesting means that the portion the company matches becomes “yours” over time. For example, a typical 3-year vest means that after 1 year, 1/3 of whatever the company contributed is now yours. If you’ve got (for example) a 3k company match that you meet every year, at the end of year 1 you “vest” 1k of company money of the 3k matched (meaning it’s yours, even if you leave), at the end of year 2 you keep 4k of 6k the company has matched, and at the end of year 3 you keep all 9k the company has contributed as well as everything contributed after that.
You got snagged by that first issue, not vesting.
The reason defined benifits pensions are gone is they break companies.
What killed Sears? Bad business practises? Sure, maybe a little. The fact they were spending more on thier pension benifits than they were on active employees by the end was what did them in. People live too long (on average) past current retirement age to make defined pensions tenable finacially.
Where I am, Federal Government jobs are the only ones with defined benifits pensions, colloquially referred to as a ‘Gold Plated Handshake’.
Sears was killed by Eddie Lampert.
Yeah, it wasn’t pensions that killed Sears, it was an insane CEO ideology that forced internal divisions to compete against one another in a zero sum game. Also they did the classic vulture capitalism thing where they forced the stores to sell the valuable real estate they already owned outright and then take out a lease on the land they had just sold. Just absurd decisions that only make sense if you’re personally raiding the company.
This is a lie in many ways.
I worked at Sears for quite a few years, starting when I turned 16. I was there when the catalog grenaded, and was there for quite a while after. Spectacularly bad management.
But that didn’t kill them. Eddie Lampert might be the one, but if it wasn’t, it was definitely outside business.
I should also add that it was in 1989 when they smoked the salespeople by removing their hourly pay and made them all commission-based. A whole lot of people suffered and many dipped at that time. 16-year-old me watching a whole lot of older lifers eat it was a pretty powerful image I’ve never forgotten.
Well then maybe they should manage themselves better and plan for those future expenditures instead of doing stock buybacks or exponentially grow executive pay.
Blaming the line worker for management failures is an incredible leap.
I live in Wentzville MO, where a GM plant is on strike. Retired from a professional job a couple of years ago. For some extra coin, an opportunity to work with my hands, and a change of pace, I applied to work at the GM plant last summer. Also at a couple of other manufacturers in the area. GM, with their temp structure was the lowest paying. Also the way slowest to respond to me about anything. I ended up at a great local firm. Me the gearhead thinks it would have been fascinating to work in a modern car plant. As a temp, low wage, would UAW have spit on me? Dunno. Not a concern. BUT- me thinks the union fighting to get rid of the tier pay schedule makes sense
did not know newer union employees had no pension. That is a big value over 401k. While pensions are going away in general, they would a valued job feature
me thinks a 40% pay hike over 4 years is absurd. And CEO pay is certainty absurd too. So no sympathy for upper management.
while I am not a union guy, I hate to see good jobs where employees add value be diminished.
40% is not really absurd when you consider they lost out on 15 years of COLA increases.
There needs to be balance. But is it possible?
Top management should not get a thousand times the wages of the workers. That breeds resentment – heck, I get furious thinking about it, and I’m not even involved. A maximum wage is as important as a minimum wage.
But on the worker end, if EVs take fewer people to assemble them, tough nookies. Yes, retrain where possible, but you can’t keep people around because they used to be important to the process. Just as billionaires have terrible optics by having more money than a person can spend, “workers” sitting around pulling a paycheck when there’s nothing to do makes unions look lazy and greedy.
Carve off both ends of the bell curve and maybe we can start to make progress rebalancing our society. Sadly, even I think it’ll never happen.
$16/hr for vehicle assembly is absolutely absurd – too low, especially in 2023 America. And I find it appalling that it’s a seniority-based comp program vs. a skill-based one. Ugh.
Thank you for taking the time to go out and talk to workers. Hearing their perspective is key.
Would it be possible to get an understanding of worker pay in non-union shops like Toyota and others operating mfg in the US? Not to both-sides the thing, but to understand the economics involved.
I live in a LCOL rustbelt city (with virtually zero automotive presence) and we don’t even pay assembly workers that low. I’m pretty sure temps start at $17 or $18 around here.
I’m in the midwest. Menards, a home depot competitor, hires cashiers with no training at $22/hour.
Really appreciate y’all getting out there and talking to the workers. I think it shows the value of having a site whose editorial decisions are not beholden to large capital stakeholders.
Aside from all of us, of course.
One thing that’s never mentioned in these discussions is the graft/corruption/featherbedding that the UAW brings to the workplace. Ask the UAW guy how many “workers” at that plant they have in “non-productive” slots. How many relatives of the union leadership are on the “health and safety” committee? How many union reps are getting 7 day/ 12 hour pay for sitting around playing cards between trips to the shop floor prospecting for grievances?
This stuff goes way beyond the dollar and cent wage numbers. That’s the kind of cost the transplants and Tesla totally avoid.
This isn’t the 1930s, knock it off with the anti-labor lies.
no, bub, I’m a union member and pro-union, but it’s a thing
Wow so true I did not know that!
If you didn’t know, how do you know it’s “so true”?
who’s paying you to say this?
Eh… I’ve seen a little of what he’s talking about (in the development world, not at a plant). It’s certainly not everyone, or even a large portion, but the UAW’s definition of “job security” is sometimes “a job you cannot be fired from ever, for any reason, even if you don’t do it”, and there is a small group who has turned taking advantage of that into a sport and punches well above their weight in terms of the damage they can do. Examples here are stuff like the guys who stand around waiting for a clay modeler to drop a lump of clay on the floor and pick it up themselves, then file a grievance against them for taking away their work. Picking up lumps in clay is their job.
Though I think that line about getting paid to play cards refers to the “jobs bank”, which is long gone.
Nobody, I lived this world for 42 years. If you don’t believe me, read the book “Overhaul” by Obama’s “car czar” Steve Rattner.
Gonna go out on a limb and say not very many, since usually these type of talking points apply towards a small amount of people.
Bless your heart, why do you think the old UAW leadership was voted out and Sean Fain gained their presidency? Now, it would be good for the UAW rank and file to hold their union leadership and stewards to account. I’m hoping the UAW gains a reasonable victory then uses that as leverage to unionize other factories, even down south. The ‘foreign’ automakers are too entrenched to pack up and leave. Even Tesla.
I’d say we all, except to a certain few, dislike union poor performance shenanigans. Certainly, a union giving the okay to get rid of incompetent workers is important, and hey, hiring someone who can do better after learning the job is an asset to both the union and corporation. Unions would do well to advocate that they both protect workers and actively try to improve their workforce either through training or being okay with shaving off the low performers/bad behavior so the work sector always has better workers.
unfortunately this is true
It’s interesting to me, how an internalized political and economic ideology, can paralyze so many people, that they would rather make excuses to justify the inequity of a handful of billionaires owning more capital and property than the rest of America, instead of rationally taking action to reduce or eliminate that inequity.
But here we are.
The good news is that younger generations are catching on an realizing that his damaging this is.
But hey, a bunch of ultra wealthy people are afraid of communism disrupting their wealth and convinced the country it’s worth blowing ourselves up over it.
I despise ‘communism’ being thrown about as propaganda against workers’ rights. Communism as practiced over the last century has proven to be crony garbage, ignoring the actual philosophy while the leaders take advantage of the workers… oh just like in capitalism.
Workers’ rights are important and along with unions, works councils should be a part of any corporation to represent the workers’ needs outside of solely depending on union negotiation.
Throwing magic scarecrow words into an argument will not magically win an argument.
Communism and workers’ rights are further apart on the comparison scale than Jabba the Hut and Kate Upton are on the sex appeal scale. Putting them together because the former claimed being sexier than the latter at some point in time is really lazy on the “I’ll shut you up” front.
As someone who has actually lived there and then, I can go on – I’d just prefer not to.
That is quite possibly the most hilarious comparison I have ever heard. No comment on the rest, just had to compliment anything that enables Jabba and Kate Upton to be compared haha.
they’re both considered ‘curvy’?
Given how many Jabba lookalikes I see on a typical day vs Kate Upton lookalikes I think the Jabbas are definitely out breeding the Kates. Clearly SOMEONE finds them attractive..enough.
So… like 99% of America lacks retirement security? I agree. Snarkiness aside, in general, I agree with most sentiments about fairer wages and worker benefits, but demanding pensions is somewhat out of touch/date.
It’s your responsibility for retirement is no one else’s. It’s not your employer’s and it’s not the the government!
so many bootlickers here
If it ain’t gonna be the unions who get pensions back, who do you think will?
No one. The corporate world killed them 30 years ago. It’s never coming back, ever.
nope, pensions are everywhere, dunce
401K and IRAs are a win/win. I don’t want a pension. I want the bottom 50% to own more than just 2.6% of the wealth. Pensions don’t really solve many of the truly chronic issues with wealth in the USA. If you get paid dirt while working, your pension is just going to be slightly worse dirt
From my experience at least, the only people who ever get to retire in any amount of comfort are those with pensions. Teachers, state workers, etc. Those are now gone for anyone my age. None of us expect to retire because contributing enough money to our retirement accounts would involve… needing to make more money to actually put into said accounts.
where are pensions gone for your age? Please explain.
Going through the teachers union and state union literature, it seems that the pensions (depending on the situation) still exist though the employee contributions are far higher and the payouts also appear to be less. So weakened, though not destroyed. This depends on your state, YMMV. My initial resource for a lot of this came from someone in a union-free school district (which sucks btw) that recently did away with pensions for a very crappy 401k plan. My bad on assuming that the union would have shifted to that, as basically half the purpose of the union is to protect these guaranteed retirement benefits.
God knows they are toast in the private sector though, outside of unions.
Understood. There are indeed a lot of attempts to weaken pension (they are obviously pretty expensive, to be sure), and this is of course one of the concerns with the autoworkers here
Pensions don’t solve the wealth disparity, you’re right – that’s what the rest of the union’s demands are for. They do solve the retirement problem, though. I don’t know a single normal middle-class person with a 401k who’s not worried about retirement, but I do know some happily retired pensioners.
And if you get paid dirt, you’re not going to be able to contribute much, if anything, to a 401K.
I was not implying that a 401K solves wealth inequality or retirement issues. 401K and pension are equally useless if you get paid crap. 401K, however, has flexibility benefits that a pension does not. I therefore think that implying that retirement security can only be gained via pension is worthy of a facetious reply
I can only speak for sure from a Canadian perspective. From what I understand, 401k is similar to our RRSP.
Employers have gone to RRSP’s here as well.
This is better for both sides.
RRSP and 401k are defined contribution pensions. This means the company commits to putting X dollars into a fund that will be managed by an outside investment house.
That money is in your name, not the company’s. You change companies, it’s your RRSP, no strings attached (except, possibly having it stay at the investment firm).
The downside is if the markets crash and devalue your investment. This risk should be mitigated by the investment becoming more conservative as the years move on, just like you should do with private investments.
But, once you retire, you have access to the whole amount to do with what you please. Pay off a debt, gift to the kids, etc. You also have access to the funds for a financial emergency. The money will also be inheritable at death.
Once the company has paid into the plan in your name, they no longer have a financial requirement towards you.
Now, a pension:
The company guarantees you Y dollars per month once you retire. This is a defined benefit plan.
The money for this is invested (pinky swear*) by the company into a fund that will cover the Y dollars per month they promised.
The downsides:
If you leave the company, you will only end up with part of the Y dollars (or none, if real short service). You may also end up with multiple pensions if you end up working at multiple companies.
You do not have access to the funds, only your monthly pension payout.
There is usually no provisions for inheritance, except sometimes for the spouse may continue receiving Y per month.
For the company, pensions are a financial burden, because they have to continuously prove to the authorities that the pension fund is healthy*.
If the company goes bankrupt, it can cause issues for those receiving a pension while the company works through the process*.
* these risks, in theory, have been eliminated with laws over the years. But they’ll be more Entrons and shit companies cooking the books.
I wouldn’t call defined contribution a deal breaker, and yes, this ends up being tied to your time of hire, as the companies want to dwindle down their pension owing with time.
Now, as for health insurance during retirement, absolutely a requirement for the American workers. And I would push that spousal coverage continue after death, unless the spouse is already covered.
And fuck that two tier pay bullshit.
(Full disclosure: I’m in a union and have a defined benefit pension.)
Your analysis is mostly good, I only have a few thoughts:
I think the most telling argument in favour of DB pensions is that the corporations don’t want them. They consider retired workers a liability. Gone are the days (if ever they really existed) that a company would ‘take care of you’.
I’d like to see companies provide financial literacy training for their employees!
Even if you have a pension, it’s not much for retirement security. Fund mismanagement and such can all cause it to go to shit. I’d personally prefer a 401k; I can choose how it’s handled, I can diversify the risk to a level I’m comfortable with. That being said, I recognize that not a lot of people are capable of doing that.
wrong, and an evil comment, equalled only by its stupidity
Thank you for the impartial take, much appreciated. Nice to hear the workers’ perspective about what’s happening. I very much disagree with the insane demands from the union, but I guess you start with insane to meet on your side, rather than the middle. Problem is, there are workers all over the planet very willing to do the same thing UAW workers do longer, harder, and for less pay. Yes, I understand the difference in the economies. However, organized ‘labor’ (labor in quotes for the shiftless, lazy, strike prone workers) has rendered Europe irrelevant, I worry too many employees parking themselves at complacent jobs, then demanding pay in such a painful way will just push jobs overseas. I know, I know, please keep your comments friendly, don’t tell me to kill myself, as you regularly do, commenters…
Too many workers willing to work harder for less?
I volunteer myself for the CEO role. I will only take 3 million a year, with a million signing and no golden parachute.
Bam. Just saved Ford more money than the current CEO ever would.
Wonder why replacing the C-suite with lower paid foreign workers is never an option.
Go take you hand wringing elsewhere.
Excellent point, I’d certainly CEO for 10% of what the currents are paid!
I just want everyone to take a moment and appreciate how important it is that David Tracy is going out and talking to the workers rather than just talking about them.
America needs more of this.
Hear hear! I want to hear more from the union rank and file just expressing their opinions on some basic questions rather than a reporter trying to steer an interview to fit their desired outcome.
The tiered worker thing is interesting. It became a thing because in past negotiations the union wanted to keep benefits for all their old-line workers (current union members) so they sold out the future hires and the temps. The reality is that defined benefit pension plans are Dodo birds and unsustainable in a global world. My Dad had one and it was great. I have a 401k with some matching funds. That has worked out pretty well too. Since apparently even GM can go bankrupt, it might be in the union’s best interest to negotiate a conversion to 401K for everyone with top ups for those already invested into the pension plan. Of course that may be illegal.
As for the pay tiers, in almost every job I have seen, experienced workers get paid more with the expectation that they bring more value. I think most people would agree that there should be some increase in pay for longer tenure on the job. That does mean that a noob on the line might be making less than a long-timer doing essentially the same job. If you can’t pay people as individuals based on their value, that is how it is going to be.
And finally, the temp workers. In a cyclical industry like automobiles, adjustment of labor costs are essential to meeting market demands and maximizing profits. But just like everywhere else, temps get hosed. They are paid very little, given the crap jobs and no benefits, and have no union support so they can be replaced at a moments notice. These are the people that need help but they are not voting union members so they will probably get short shrift again.
Ultimately labor costs and, more importantly, flexibility are a game of corporate whack-a-mole. If you make union jobs expensive and difficult to eliminate, then the company will hire temps. If you create a job conversion deadline for temps, then companies will just replace them. If you don’t allow temps and don’t allow removal of unproductive labor, the company will build plants in Mexico or go bankrupt.
The best part: those temps have to pay union dues even though they don’t get any of the benefits of union membership!
Of course, this isn’t the case in RTW states, and also during the 10 years or so that Michigan was RTW (MI recently repealed RTW earlier this year)
Ahh, the benefits of massive political contributions!
Agree that some parts of Tier 2 should remain like 401-k, but yeah exp should get you more no matter what tier. The Big 3 are just trying to wait out the Tier 1s retiring, further automation and moving plants elsewhere will cut UAW numbers even further the next decade. How many people have been in a modern auto plant? Most are low skill jobs; take part put in press hit button, take 2 parts put in jig robot welds, take already assembled part install tighten bolts. Paint shop worker?!, plant I visited the entire paint process is automated, colors mixed by machine with tubes feeding all the colors, robots paint the whole thing. Does that guy hook up the 55g barrels of paint?
All the UAW workers were salivating at the supposed “numbers” the teamsters got, drones delivering packages is further off than robots replacing all low skill UAW workers. Amazon is hiring 250k workers this holiday season at $20+ an hour.
Why have we all accepted that pensions are “unsustainable”? There were pensions for decades. Companies were profitable. Then companies decided not to properly fund them, and now stories come out every now and then about companies with these massive unfunded pension liabilities. Don’t we call that “mismanagement” if you “underfund” any other company function? Yet the CEO making $30M a year is perfectly OK, they always find the money for that.
I believe if GM went bankrupt, that is where the Pension Benefit Guaranty Corporation comes in. They exists to take over when a company fails and they ensure pensioners receive benefits. https://www.pbgc.gov/about/faq/pg/general-faqs-about-pbgc
Municipalities are mostly the only ones underfunding them, also because they have idiots calculating risk and market action, if they do have good calcs there is no money for catchup funds.
3 companies I worked at closed and froze the pension accts while I was there, replaced with other things, depending how much you had or tenure, funds either rolled into 401k or kept in a separate account until retirement. Unions and govt workers are the last to still have them, too friken bad for them, times change.
I’m pro pension but one thing you’ve got to realize is that people are living a lot longer then they were just a couple of decades ago. If an employee retires at 65 and lives to 85 that’s a 20 year payout. That’s a huge expense. Sad to say but longevity is what killed the defined benefit pension plans.
There’s not been an unanticipated increase in life expectancy over the past few decades.
And more recently there’s been an alarming reduction in life expectancy.
I’m just saying, that’s likely not the cost factor a lot of people seem to think it is.
That’s a pretty good argument against pensions. Not sure I’d want to take the risk that my retirement fund is being managed by someone who doesn’t have a vested interest in its growth and success.
In fairness, pensions existed for about as long as they could. When people were dying at 65 on the regular it was easier to afford. The increasing longevity of the average American lifespan through the decades is really what killed it.
Pensions used to be wise for companies when the average life expectancy for manual labor positions was only a few years after retirement. Things were calculated so the money invested paid out… of course, if you didn’t take into account that life expectancy was going up, you were going to get hosed. Also, if times were tough, and the corp wanted to short a pension plan (like so many states *cough* Illinois) did, you fell behind and it was a beast to catch up. Much like workers not being able to put money towards retirement because they weren’t getting paid enough. Pensions are absolutely okay if you think ahead, don’t be overly optimistic, and don’t short them when budgeting is tough.
401k is fine, but too many of them go for active fund management instead of passive/index management. Active fund management, unless you got some financial Carnac the Magnificent doing the picks, is a parasite on gains and just a subsidy for the management firm.
What is the point of Autopian TV if we still have so much instagram crap? Just put it in one supercut that I can actually watch
Let’s close the F-150 plant and see what shakes out!
I really don’t understand the US union system, here (Netherlands) the whole sector has to talk to a union (or more), you can’t say “our plant isn’t unionized”. So strange that toyota can just ignore it while ford has to deal with it, it’s the same job.
It is state by state. The South and West are typically “right to work” states where employees don’t have to join a union to work at some jobs. Many Southern auto plants are not unionized and while the employees have the right to unionize, the companies try to incentivize them not to with reasonable pay packages and benefits. Cost of living is often less in the South, and without union dues, non-union employees can be paid less with similar purchasing power. All that adds up to new companies (Japanese, Korean, German, Tesla) building their plants in the South where they have an advantage.
Never have I heard it put so susynchly. The workers deserve more, but the union has to have their hunk so like a slip and fall case the deserving party gets less. But without the union Noone gets much.
Succinctly….
That too!
Yeah for once spell check took the day off no suggestions
Michigan COL is 15th lowest of all states and some southern states with auto plants are a little lower, the difference isn’t what it used to be. Detroit is one of the cheapest COL of all major US cities.
yeah but who in their right mind wants to open a plant in Detroit these days. Let alone visit.
I lived in the city of Detroit for five years. Moved out last year. I enjoyed my time there.
Chrysler opened a new plant there a couple years ago. Ford is renovating the old train station and moving a lot of white collar workers there.
I stand by my statement.
Lower cost of living just means less protections for the environment, less public services, and a big FU when things go badly with employment or living conditions. Low cost of living states are wonderful when everything turns up roses. Not so much when the safety net, whether it be social services or union protections is not there.
That’s… not the case
And not only that, but the UAW has been repeatedly rebuffed by the workers at those plants they’ve tried to organize. There are really interesting Union set ups that work around the world, but the system in the US is so clearly broken. I mean, look at the last leadership of the UAW, how many of them are in jail?
The US (and Germany) are federalized governments, which means each state or province has substantially more control over governance than a nation with strong centralized government. Although… Germany has strong protections for their workers throughout the levels of government. The US has stronger rights for the states, and this allows state governments to give the workers the finger.
This is a good start, but it’s worth digging deeper. Supporting the automakers during the 2008 crisis arguably prevented other costs to taxpayers that would have been far greater had they collapsed. And who knows whether auto manufacturing would have ever returned in the US?
And since then, the big three have taken billions in profits and used them for stock buybacks and increases in executive compensation, while this “temp” nonsense has continued. Their priority is not the “safety of our workforce.”
Employers don’t give workers anything. Unions give some balance to the inherently unequal dynamic between employers and workers.
“And since then, the big three have taken billions in profits and used them for stock buybacks” — I hate that this is legal.
The temp worker thing seems fishy. In a previous job, we had to be very careful how long we kept people in contract or temp status. Once you kept them over a year, you could get into sticky implied employee status. From vague memory, the related rules came about from Microsoft keeping people as indefinite contractors to avoid paying benefits.
Pensions are a relic of a bygone age. They can be a tremendous expense to fund and if investments don’t cooperate become the underfunded liability from hell. 401ks give employees a hell of a lot more flexibility and don’t tie you to an employer. No more better suck it up for the next 10 years until you are eligible for full pension
I’m liking the goatee, it’s like mirror universe DT.
Mirror DT is a fashionista, breaks cars, and kicks kittens.
That’s Divad Ycärt. His alter ego for his travels in Turkey.
It’s not surprising that the union sees it this way, but they also got job protections and preferential treatment over other creditors during the bankruptcy, while white collar employees, bondholders, and ultimately taxpayers made good the losses.
That isn’t to say that some of their demands today aren’t reasonable. But the idea that there’s some massive unpaid debt that the automakers “owe” the union for 2008-09 is faulty.
Something I quite admire about this article is how its simply news. It is an expression of events that have occurred and opinions and statements from both side that are directly involved. I’m not being groomed to have DT’s opinion here. He’s laying it out so I can later ask better questions and decide for myself if there is a right side and a wrong side, or just a bunch of people looking to agree on a fair middle.
this is what journalism was, before everything got bought up and owned by the same 5 companies. Love to see it, hopefully makes a comeback.
Get out of here with all your hot takes.
But seriously there is a lot of, “if you’re not with us, you’re against us,” rhetoric around here.
I can honestly see a lot of arguments from both sides and I’m really interested in the issue from a societal labor evolution standpoint. This will have ripples through a lot of the future workforce in this country for good or ill.
Because there are good points on both sides of this argument I just don’t know where I stand. I do think the workers deserve some of their grievances addressed and acted on but I also see where so much of the extreme in their demands will lead to an unsustainable financial hole. Ultimately I’m sure somewhere in the middle is where they land where workers are better off but no one is truly happy with it.
My first job out of college was managing a union workforce in a steel mill, which has permanently affected my views on labor relations.
I would like all American workers to get a fair deal from their management.
I would also like most unions, as currently constructed, to burn in hell.
I think it’s possible to do both. But I agree the temperature around the issue is too hot right now. Plenty of people here who’ve never spent a minute in a factory rushing to label every comment even mildly critical of the union as “pro-billionaire” or “bootlicker”. Grow up.
Pay for new hires got cut in half in 2008 and are far from recovered. The auto companies also make billions in profits each quarter. That is what they mean by what they are owed from the restructuring.
Again, they got a lot more than they should have under normal bankruptcy proceedings.
https://www.heritage.org/testimony/auto-bailout-or-uaw-bailout-taxpayer-losses-came-subsidizing-union-compensation
They also received job protections that white collar workers didn’t, and preserved pensions and high pay for older employees.
You can argue, and I’d agree, that the companies can afford to pay them more now. But lets not pretend that it’s some kind of payback for 2008. The bailout deal was a sweetheart for them.
You have to remember that the banks basically write all these laws to benefit themselves. The UAW as an organization may have made out better than would typically happen in a bankruptcy (I think they got around $2 billion in GM stock), but that money doesn’t go to the actual workers. They still are paying dues and working the same job at half the pay.
The money they got from the bailouts went directly into their pension funds. So yes, the workers (or retirees) did get that money directly. Existing UAW members also didn’t take any pay cuts.
In a normal bankruptcy, the pension fund would have received the same percentage of assets as any other creditor.
We don’t disagree on the entry level wages being too low. But that’s not what I’m arguing. No one who was a UAW member at the time of the bankruptcy is making those wages.
Interesting- but is there a source for this that isn’t a partisan think-tank?
The spin on it is partisan, but I trust the numbers are factual as they are presumably public record.
What they should do is limit the time someone can spend as a temp, and limit the number of temps as a percentage of employees.
Better yet, actual guaranteed temp to hire plans, otherwise you’ll end up in the constant cycle of temp in temp out
Yes, that would be part of it
One of the Australian site agreements had a clause casual workers after 6 months got an additional 200% (might have been 250%) loading on their base wage. (noting that the casual rate already has a 25% loading as they don’t get holiday pay etc). The intent was basically if you need some short term labour for a peak of a project, or test someone out on casual first, that’s fine you don’t get stung too hard, but if it goes over 6 months you should probably hire them full time as things are working out ok, and if you don’t you’re being significantly penalised for it. There was a bit more detail to it, such as minimum 12 months (might have been 24…) before re-hiring the individual as a casual, if within 12 months they go directly on as full-time.
It’s a problem if you’ve got a 9 month peak, as you then end up with redundancies etc when a project finishes, but that’s construction issue, not really an auto manufacturing problem.
I think it is one of the fairer ways of doing it, gives some flexibility if required.
You could just turn over the workforce every 6 months, I don’t think that’s really practical with the re-hire clause in play (and quality, on boarding costs etc).
But yeah, Aussie ain’t the US…
The temp status should be one of, if not, the most important things on the contract negotiations. I am a former tier 2 UAW employee and when I hired in I was a temp for 1 year, some people before me had to spend 2 years as a temp, and then after me they dropped to 90 days. It sucks being a temp since you still pay dues, but get none of the good benefits. No vacation, limited medical coverage, etc. They need to make it so after say 90 days of proven good service you are automatically converted.