UAW Ready to Trade Wages for Jobs?
Mar30

UAW Ready to Trade Wages for Jobs?

By Charles Krome

Some time later this year, the folks at GM’s Orion Assembly plant, located in Orion Township, Mich., will start putting together the all-new Chevrolet Sonic and Buick Verano. It will mark a significant change in the General’s usual strategy of building its small cars in other countries with reputations for low labor costs, but that’s because it marks a significant change in the UAW’s usual strategy, too. As some readers may already know, as part of its efforts to support GM’s recovery from bankruptcy, the union agreed to institute a two-tier wage scale at the plant. While veteran workers will continue to earn their usual salaries, newcomers will be hired in at pay rates some 40 percent lower.

And now the Detroit media are reporting that the UAW will consider extending the two-tier system to other GM plants, again in return for the promise of more jobs. It’s just the latest news about what this fall’s union negotiations with the Detroit Three will likely bring, but it’s also one of the few areas in which the UAW is expected to cut the OEMs some slack.

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Fiat Considers Moving HQ to Detroit, Annoys Italians

By Chris Haak

Italian automaker Fiat, which of course has a large ownership stake in Chrysler Group, and which is in the process of planting its Fiat flag on US soil again in the near term, may actually move its global headquarters from its historical base in Turin, Italy to Detroit.  Fiat and Chrysler CEO Sergio Marchionne said at a conference last Friday that the company would likely merge Fiat and Chrysler operations within the next two to three years.

Once the operations have been merged, then there is the question of where to headquarter the future merged company.  Chrysler obviously has a large presence in the US, and Chrysler sales will make up a sizable portion of Fiat’s global sales, particularly if Marchionne’s aggressive volume and market share targets for Chrysler are met over that timeframe.  Based on 2009 numbers, Chrysler’s [depressed] sales would represent about 28 percent of combined Fiat-Chrysler sales, so it’s reasonable.  But there’s probably more to it than just headquartering where the sales are.

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