As Detroit 3 automakers and the industryís largest labor union gird themselves for contract negotiations in 2015, one of the topics on the table likely will be the two-tier wage system.

Late last year a top United Auto Workers official fired an early warning shot, saying that the union wants to eliminate the compensation model in which newer employees are paid at a drastically reduced hourly rate ó sometimes as much as half ó than their veteran peers despite doing essentially the same work. The union grudgingly agreed to its implementation, presumably to preserve jobs as domestic automakers were struggling to remain competitive when the contract was negotiated in 2007.
Still, trying to abandon the two-tier system might prove difficult, said David Kern, a partner specializing in labor and employment law at Quarles & Brady in Milwaukee. Globalization and the availability of nonunion plants continue to provide employers with cheaper options, he said. Moreover, itís always difficult in negotiations to try and take something away thatís provided a benefit to one side for an extended time period.
United Auto Workers Looks to Change Pay Gears as 2015 Negotiations Loom | 2014-03-09 |