Maine news, sports, weather from Portland Press Herald / Maine Sunday Telegram, Portland, Maine

October 22, 2012

Autoworkers earning less in U.S. happy to compete globally

The U.S. economic recovery has been fueled by an industry that gave up decades of union gains to bring back thousands of jobs.

By JEFF GREEN and KEITH NAUGHTON/Bloomberg News

SOUTHFIELD, Mich. — Debbie Werner is the face of an American workers' revolution.

In a break with decades of U.S. auto-union tradition, the prevailing wage paid to new unionized autoworkers is less than that of the average laborer producing items ranging from metal and wood products to food and beverages.

Werner has lived through it all: She joined General Motors Corp. in 2008 before its bankruptcy, lost her job when the factory closed and then was rehired in 2011 when it opened again after the bailout – joining thousands of new workers earning about half what autoworkers were paid before 2007 and without traditional pensions and retiree health care.

Part of President Obama's re-election platform is his 2009 decision to support an $85 billion bailout for the U.S. auto industry, the subject of a vigorous exchange at last week's second presidential debate. Less understood is the new class of autoworkers who, even before the bailout, started taking jobs that gave up decades of union gains and agreed to an uncertain economic future to bring thousands of jobs back to American factories.

"In 1960, an autoworker was the symbol of high productivity, global leadership and a middle-class future," said Harley Shaiken, a professor of labor relations at the University of California at Berkeley. "Today, an autoworker is a symbol of all the pressures of the global economy."

Werner, though, said she couldn't be happier.

"It's just an opportunity for me," said the 30-year-old, who installs seat-belt covers and dashboard parts on Chevrolet Sonic and Buick Verano cars at General Motors' factory in Orion Township, Mich. "It's a better life for my kids."

A COMEBACK WITH CONSEQUENCES

Since 2007, the United Auto Workers has agreed to let automakers hire new workers who forgo traditional retiree health care, equal pay for equal work, job security and pensions in exchange for jobs that would have gone to Mexico or Asia. About 13 percent of GM, Ford and Chrysler hourly workers, or 15,155 employees, now are entry level.

The union's concessions were inconceivable – and easily rejected by labor leaders – just a few years before. Now, as many as half the workers at the Michigan factory assembling Sonic and Verano sub-compact cars make less than the $19.10 hourly average U.S. manufacturing wage and lack traditional union retiree benefits.

The U.S. economic recovery has been built on the shoulders of autoworkers such as Werner, who left a $9-an-hour job at a nursing home in November for her $16.78-an-hour job at GM, and David Ramirez, 39, who earns $18.41 an hour installing mounting brackets for transmissions at the same plant. In August 2011, he escaped an $8-an-hour job making doughnuts at Walmart.

While the rest of the U.S. economy continues to lag, the significance of the auto industry's comeback is hard to overstate. Autos contributed 18 percent of the 2.2 percent average rate of growth for gross domestic product in the recovery that began in the third quarter of 2009 – when GM followed Chrysler out of U.S.-backed bankruptcy – to the second quarter of 2012, according to data from the Commerce Department.

The U.S. auto industry sold cars in September at a faster rate than in any month since March 2008, before the failure of Lehman Brothers. GM earned $9.19 billion last year. Automakers throughout the U.S. have been on a binge of hiring that has led to third shifts in eight states.

"This is the reason we have job growth in the United States," Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor, Mich., said in an interview. "I don't think we would have seen the new investments and the job growth in the United States without some movement in labor costs."

(Continued on page 2)

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