Posted by Sean Ruple.
Wages for U.S. auto workers have declined by roughly 17%, since 2010. In response, the United Auto Workers association is fighting for higher wages, changes in pensions, and an increase in job security. The UAW is claiming that “corporate greed is keeping workers from earning fair wages” as CEOs from the 3 major companies (Ford, Stellantis, and General Motors) have taken home $1 billion collectively, since 2010. Just last year, CEOs; Mary Barra (GM), Jim Farley (Ford), and Carlos Tavares (Stellantis) took home massive yearly salaries reaching up to $34.1 million dollars. Wages for the auto industry have been depleted, as the Bureau of Labor Statistics reports that since 2003, the average hourly rate for auto workers has declined by about 30%. A few factors impacting a scale back in wages has been the rise of non-unionized car production in the US, as well as the UAW agreeing to lower wages for new hires at the Detroit Three plants in 2007.
Workers are getting tired of drops in salary, while CEOs remain unscathed from pains in the industry. Additionally, General Motors and Ford have tried to undo concessions agreed to during the Great Recession. One of the benefits, being pensions, as any workers hired after 2008 will not receive one. Pensions can be costly for a company, as a study found that companies save 13.5% on long-term employee payroll costs when defined pension benefits are frozen. Additionally, the article claims that “Since 2005, GM has cut its retirement obligations by almost 70%, according to Bloomberg Intelligence analyst Steve Man, Ford has trimmed its pension liabilities by almost half in that same time frame” (Greenwald 1). This proves that company’s and CEO’s may be more inclined to cut company costs and liabilities, instead of support workers in a laborious field for the long term. This will certainly impact employee retention rates, as workers feel expendable and will be less likely to work for a company long term. Meanwhile, during union negotiations, wages have been the focal point, as the UAW has asked for a 40% jump in raises, with a minimum of 30%. In response, Ford has claimed that a 23% raise is as high as it can go, with GM and Stellantis reluctant to offer anything above 20%. This topic has a lot to do with ethicality, as the auto industry is failing to raise employee wages and provide concessions for workers, while still using massive funds to pay CEO’s, high-level management positions, and for vacant battery plants. This can relate to workers’ rights in the court of law, as employees have been given little compensation for a loss of pensions and prolonged decreases in salary.
To make matters worse, 65 plants have been closed or spun off by GM, Ford, and Stellantis in the past 20 years. Additionally, the auto industry is transitioning to EVs, as the union wants more job security in the future. This makes the job market for auto workers even more scarce, possibly giving companies even more leverage to put off wages and employee concessions. On the other hand, vehicle manufacturing workers still make more than the average private sector worker, and UAW members are also paid higher than non-unionized workers in the sector. CEO Barra has claimed that company labor costs are already 22% higher than Tesla’s, and fulfilling the asks of the UAW would only give them more of a competitive disadvantage. This leads us to wonder if only a few companies are sacrificing employee wages to limit liabilities, or if the entire industry is a problem?
Sean is a student at Seton Hall University.