With all the proposals being floated in auto, the one constant is GM’s and Delphi’s efforts to increase profits by cutting jobs and benefits.
A recent agreement between GM, Delphi and the United Auto Workers Union has not removed the prospect of a strike at Delphi, the auto parts maker, as the company still plans to move more operations overseas, slash wages and reduce benefits. Delphi has said it wants to eliminate two-thirds of its workers and win more concessions from those who remain.
GM offered buyouts to all of its 113,000 workers and to the 13,000 UAW members at Delphi. While the agreement with the UAW shows the strength of having a union going to bat for you (workers at nonunion shops often lose all benefits and get no or little severance pay), it raises troubling questions for many current autoworkers and their communities.
Will there be jobs available at GM for the Delphi workers who want to return? GM has agreed to accept only 5,000. The others are promised access to a job bank, but only through the life of the UAW contract, which expires next year. GM has called the job bank a “burden.”
Delphi workers with more seniority have a better chance of keeping their jobs, raising concerns the agreement may cause disunity in the union by pitting older workers against younger ones.
For workers with less than 27 years of seniority, the offer of $140,000 (which after taxes amounts to approximately $100,000), coupled with the loss of pension and health care benefits, doesn’t sound too good if don’t have another job with benefits lined up. Same goes for those with less than 10 years who are being offered $70,000 (about $50,000 after taxes).
The loss of good-paying union jobs will have a rippling effect through the economy. The growth in the U.S. of nonunion jobs at Honda, Toyota, Hyundai and Nissan creates downward pressure on everyone’s wages and benefits. Many auto jobs, of course, have moved to low-wage plants overseas.
The next round of contract negotiations will be difficult. How hard will GM press to eliminate the job bank? Will they push for a two-tier wage for new hires, which is already in place at Delphi.
Autoworkers and their families are wrestling with the positives and negatives of the buyout options and trying to sort through many other difficult questions they and their union face.
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