Friday, July 13, 2007

Equal work, unequal pay

Thursday, July 12, 2007
2007 UAW CONTRACT TALKS / Fifth in an occasional series
Equal work, unequal pay
With new workers paid far less than their colleagues doing the same job, Chrysler's Belvidere plant may be the future
Josee Valcourt / The Detroit News

BELVIDERE, Ill . -- At $18.50 an hour with limited benefits, Forrest Ammons earns a decent living building cars at Chrysler's Belvidere, Ill., assembly plant.

But Ammons toils side-by-side with workers who make $10 an hour more than he does and enjoy full health care coverage, generous vacation time and a host of other benefits and protections.

Ammons, 35, is what's known at the Belvidere plant as an "enhanced temporary worker," a designation that not only sets him apart from his full-time co-workers but also UAW members at every other Big Three assembly plant in the United States.

The unique arrangement between Chrysler and United Auto Workers paved the way for a third shift at Belvidere, which was awarded three new vehicles -- the Dodge Caliber, the Jeep Compass and Jeep Patriot. But it also has sowed dissention on the plant floor and spawned a federal lawsuit by temporary workers.

The Belvidere situation provides a glimpse of what could be the future for American auto workers -- two classes of workers doing equal work but earning unequal pay.

Cost-saving two-tier wage structures -- where new hires make less than veteran workers -- have already become a reality for plant workers at auto suppliers Delphi Corp., American Axle & Manufacturing Holdings Inc., and most recently Dana Corp. Illinois-based equipment maker Caterpillar Inc. The UAW agreed to two-tier wages in 2005.

General Motors Corp., Ford Motor Co. and Chrysler are expected to press the UAW for more changes in key areas including wages when bargaining starts this month on a new national labor agreement. A broader two-tier wage structure that stretches into more domestic auto plants would help the Big Three become more competitive but also could have profound implications for union solidarity and worker morale.

"Two-tier is a flashpoint word especially for the UAW, which has such an embedded notion of solidarity," said Karen Boroff, dean of the Stillman School of Business at Seton Hall University in New Jersey.

UAW officials last month began calling plant-level union leaders to gauge opinions about the possibility of a two-tier wage structure, said Chris Sherwood, president of UAW Local 652, which represents GM workers in Lansing's Grand River plant.

"They're talking about the feasibility of two-tier wages in the next contract," said Sherwood. "Whether (automakers) are going to get it or not is another issue."

Belvidere serves as a case study for the benefits and drawbacks of creating separate wage structures within an auto plant. Without the agreement, the plant might never have snagged the new vehicles and the third shift that keeps it humming around the clock while many other U.S. auto plants have been idled or work on one shift. The 40-year-old, 3.9 million-square-foot Belvidere received a $400 million renovation to build the new vehicles.

Toyota utilizes temp workers

Toyota Motor Corp., the Big Three's most powerful competitor, has used temporary workers liberally to keep costs down. It also allows the automaker to easily adjust its plant staffing when demand rises or drops. As much as 20 to 25 percent of Toyota workers in U.S. plants are temporary at any given time, said Sean McAlinden, chief economist for the Center for Automotive Research.

Chrysler has similar flexibility for the first time in Belvidere. Thousands of workers jumped at the chance to interview for the 600 new jobs last summer.

But some of those who hired in as "enhanced temporary workers" for up to two years have become embittered about the disparity in compensation that goes well beyond wages.

Ammons and other enhanced temps hired in Belvidere receive no dental or vision coverage, no pension credits or sick pay and no guaranteed raises. They can be laid off at any time -- and more than 100 have been -- and are not eligible to receive pay through the jobs bank that protects other laid off UAW workers.

"Enhanced temp workers aren't treated like regular employees," Ammons said. "It's like a caste system."

The only equality is in work load. In teams of six or seven workers, enhanced temporary employees assemble the small cars and SUVs beside permanent production workers.

Workers file lawsuit

The situation is complicated further by a federal lawsuit seeking class action status filed late last year by a group of enhanced temporary workers, including Ammons.

The suit against Chrysler and UAW claims that automaker and the union never made it clear to workers that they were applying for lower-paying, less secure positions until they had already committed to taking the jobs. Chrysler has countered that all workers signed documents that clearly laid out the terms of the positions.

The UAW "sold its soul to get these three cars," said Jim Doser, a 57-year-old enhanced temporary worker who joined the lawsuit.

Chrysler doesn't view its move as a two-tier system because the lower-paid workers aren't permanent hires. But some workers and union officials say that's just semantics. Unlike temps in other places who work a few weeks or months at a time as fill-ins, the enhanced temporary workers at Belvidere can work year-round for up to two years.

"These people are not replacing people that are off work or absent," said one union official who asked to remain anonymous. "They're actually there as full-time workers. There's a difference. They're there doing a full-time person's job."

Last October, Tom Littlejohn, president of UAW Local 1268, which represents Chrysler workers in Belvidere, filed an unfair labor practice charge with the National Labor Relations Board against the UAW International and Chrysler. He asserted the "enhanced temporary employees" designation violates the union's labor agreement with Chrysler that allows temp workers for a maximum for 120 days. Littlejohn later said he was instructed by UAW officials to stop publicly discussing the issue.

Union leaders at Local 1268 acknowledge the situation has caused friction.

"Do I think we got problems with (enhanced temporary employees) and senior employees? Sure," said William Pruitt, vice president of Local 1268.

But he wants enhanced workers to know that "at my plant, they are no less important," he said.

Pruitt said he isn't sure how the issue will play out in the upcoming contract talks, which run through Sept. 14, but he'd like to see the enhanced temporary workers in Belvidere become permanent workers. "We'll know more when September gets here," Pruitt said.

Some permanent UAW workers at Belvidere find the situation unsettling for what it portends. "They shouldn't be here," said Mary Beth Craw, a UAW production worker making full wages and benefits. She recently was sent home early after logging about five hours of work.

While Craw and some co-workers headed to "Take 20," a local watering hole four miles from the plant, enhanced temporary workers remained on the job for "their full eight-hour shifts," she said.

"They're making things tough for the full-time employees," said Ron Weaver, a production worker, who sat on a bar stool next to Craw.

He wondered aloud whether Chrysler's soon-to-be new owner, private equity firm Cerberus Capital Management, will demand the lower wage scale all workers. "Cerberus is going to say, 'Hey, they're making $18 an hour. Why can't you?'" Weaver said.

Is solidarity at risk?

Doser, an enhanced temporary worker, said he understands the auto companies "have to be competitive, no doubt," he said, but not by surrendering its core values. Doser has been an UAW member since 1973 and laments the loss of unity and shared sacrifice.

"Where is the solidarity? If the union had to take a cut in the past, the entire union would take a cut," he said. "Now these people are turning around and selling me out. You better believe that I'm angry."

But times have changed for both the UAW and American automakers.

Twenty years ago, the Big Three automakers possessed nearly 70 percent of the U.S. retail car market in 2000. Now GM, Ford and Chrysler have a 51.9 percent stake while Asian rivals, and Europeans automakers account for the rest.

UAW membership has fallen in tandem with the Big Three's shrinkage, dropping below 600,000 last year from a high of more than 1.5 million in 1979.

"The thing with the UAW is they're dealing with how to save jobs," said Gary Chaison, labor expert at Clark University in Worcester, Mass.

"That's really their primary objective right now."

However, some union officials are doubtful that the UAW would backpedal on wages to shield jobs.

"I don't see Ron Gettelfinger doing anything like that," said Ed May, president of UAW Local 961, who represents workers at Chrysler's Detroit Axle plant.

For those who bargained in previous UAW contracts talks, the reality of givebacks -- particularly in wages -- is a tough pill to swallow.

"It's not good to see things that you worked your whole life for slipping away," said Robert Denison, a former UAW international representative for Chrysler workers before retiring in 2000.

"But this is a long fight and sometimes you take a whipping in the third round and come back in the seventh round and kick butt."

You can reach Josee Valcourt at (313) 222-2575 or

© Copyright 2007 The Detroit News. All rights reserved.


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