Economist Sean McAlinden said that by 2015, about 36,000 factory jobs will be added by the Detroit 3 (GM, Ford, and Chrysler) and they would all be paid half of the wages and benefits that are typically given to traditional UAW autoworkers.
McAlinden spoke to reporters at the sidelines of his lecture at Wayne State University. He estimates that carmakers are close to hitting the production limits of its 102,000-member UAW work force on maximum overtime. He said that these companies have to hire more people to boost production as soon as all laid-off UAW members nationally have returned to work by September.
McAlinden, the executive vice president of research at the Center for Automotive Research, said that these would all be “Tier 2 hires."
Under the existing contracts that the Detroit 3 have with the UAW, they’re allowed up to 25% of their hourly workers in the lower-wage category. These provisions are effective until 2015. But then, informal talks have started between the Detroit 3 and the UAW to replace the current four-year contracts that are scheduled to expire this September.
McAlinden said that because of UAW contract concessions in 2007 and 2009, the average hourly UAW compensation with wages and benefits has been reduced to about $58 an hour. This is only $2 more an hour than what Toyota pays to workers at its Georgetown, Ky., assembly plant.
McAlinden also said that if GM is able to bring its existing 49,000 hourly work force to 20% Tier 2, the average hourly compensation will be at $48 an hour. What this means is that the carmakers get higher profits.