Detroit 3 Are Expected to Add 36,000 Tier 2 Jobs by 2015

The Detroit 3 are expected to add 36,000 factory jobs by 2015, all of them paying new-hire wages and benefits that are half of what is typically paid to traditional United Auto Workers employees, economist Sean McAlinden said on April 12.

The carmakers are producing near the limits of what the current UAW work force of 102,000 can do on maximum overtime, said McAlinden, who spoke with reporters on the sidelines of a lecture at Wayne State University in Detroit.

They will have to hire to increase production once all laid-off UAW members nationally are back to work by September, he said.

“They’ll all be Tier 2 hires,” said McAlinden, executive vice president of research at the Center for Automotive Research in Ann Arbor, Michigan.

The Detroit 3 are authorized under their current contracts with the UAW to have up to 25 percent of their hourly workers in the lower-wage category. Those provisions extend until 2015, even though the Detroit 3 are beginning informal contract talks with the UAW to replace the current four-year contracts that expire in September.

McAlinden said UAW contract concessions in 2007 and 2009 have reduced the average hourly UAW compensation with wages and benefits to about $58 an hour, just $2 more an hour than that of Toyota at its massive Georgetown, Kentucky, assembly plant.

He said General Motors Co., if it could get its current 49,000 hourly workforce to 20 percent Tier 2, would bring its average hourly compensation to $48 an hour. That would mean greater profits for the carmaker, he said.

McAlinden said Ford Motor Co. has a 50-50 chance of being the UAW’s first target for negotiations since the company is the most profitable of the Detroit 3 and workers have the right to strike.

He added that Alan Mulally’s 2010 compensation of more than $26 million has galvanized Ford rank-and-file to demand more money in this year’s talks. It is a symbol that every worker recognizes. “It didn’t help,” McAlinden said