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Wed September 28, 2011
At auto plants, a reversal of fortune
*Editors note - This story by Kate Davidson of Changing Gears was first broadcast last year (September 22, 2010). Now that GM and the UAW have agreed to a new contract that will allow GM to hire more "two-tier" workers (newly hired workers paid a lower wage than traditional workers), we thought we'd bring her story on "two-tier" workers back. As Micki Maynard of Changing Gears points out, only about 4 percent of GM's workforce is "two-tier" now - under the new contract, that number could go up to 25 percent.
The American Dream is that each generation will do better than the last. But many families of auto workers no longer have that expectation. As Detroit car makers sped towards financial ruin, their union agreed to a dual wage structure, plus deep cuts in benefits.
Now, new hires earn about half what traditional workers make. This reversal of fortune has altered their lives.
The newest workers at General Motors, Ford and Chrysler have an unusual name. They’re called “two-tiers,” meaning their wages fall on the second tier of pay in their union contracts.
Will Dunlap is one of them. He says the two-tiers joke that, “If two two-tier people died in a fire, they’d save one GM employee lost. You feel like half an employee.”
For these two-tiers, the starting pay is $14 an hour. But when Will Dunlap reports to the assembly line outside Lansing, Michigan every afternoon, he works alongside “traditional employees” who make about twice that. They include his mom, Debbie Dunlap.
Debbie Dunlap remembers the days more than a quarter century ago when she was first at GM and was paid $14 an hour. She says it’s hard for her to watch the two-tiers now earn the same wage that she did then. Her son is only 24, still young enough to dye his hair green in support of the Michigan State football team. He doesn’t have a house payment yet or a family to support.
Will Dunlap says he’d love to be able to buy one of the cars he builds, but does not make enough to do so. “It’s such a far away thought, it’s sad,” he said. “I crank out 500 of them a night and I can never afford a single one.”
Making Cars, Making Sacrifices
Will and Debbie Dunlap, who work at the Lansing Delta Township plant, build GM’s popular crossover vehicles – the GMC Acadia, the Buick Enclave and the Chevy Traverse. These days, the factory is humming with activity, with several thousand employees working around the clock to produce about 1,200 vehicles a day.
This scene would have been almost unimaginable 18 months ago. By then, the new two-tier system was in place, but Detroit car companies were struggling to survive. When GM filed for bankruptcy on June 1, 2009, President Obama warned the nation that building a leaner company would involve further costs to everyone.
For older workers, the sacrifice comes in their precious health care coverage and other hard fought benefits. For newer workers, this reversal of fortune shows up most dramatically in their paycheck.
For Debbie Dunlap the two-tiers bring back memories of her first day on the line in 1984. When she showed up, she says, her supervisor told her:
“One thing you need to know right up front. I don’t like women working here. And if you can’t do the job the same as a man in here, then you’ll go out that door the same way as you just walked in it.”
Today, some two-tiers say they feel like second class citizens.
Union officials have a challenge when it comes to the two-tiers, partly because, for the moment, there aren’t that many of them. GM says it has about 2,000 two-tier employees out of 53,000 hourly workers nationwide. The company is currently focused on recalling workers who’ve been laid off, and these workers return at their traditional wage.
The difference between tiers comes down to the date of hire, or, in one family’s case, the date of birth.
Brothers … And Not Just In the Union
Derick and Justin Jewell are brothers. They’re both auto workers. In fact, their brother and sister are, too. Derick and Justin live together in Holly, Michigan, in a house that Derick bought. They’re both strong and good natured.
The main difference between them?
Justin Jewell is 22 and makes $16 an hour. Older brother Derick is 24 years old and makes $28 an hour. So that’s two years and $12 an hour.
Still, Justin says, he’s got a good union job. He’s not flipping burgers for $7 an hour, and he’s not sure where else he could be making what he makes now.
“Lot of plants have closed down,” he says, “And we’re not too far from Flint where, for a long time, a lot of people were laid off. So there’s a little bit of remorse but at the same time there’s some faith and just being glad to have a decent paying job.”
Justin Jewell works at the same Lansing assembly plant as Will and Debbie Dunlap. At 10:36 every night, as the plant’s second shift ends and the overnight begins, Will Dunlap walks his mother to her car. She’s proud of her son, proud of their work and the life she’s built. But she’s worried that Will is only going to be able to survive.
“I wish I could just tell Billy, okay, you’ve had a life experience,” she said. “It hasn’t been pleasant. It’s time to move on. How can you? I mean, he needs an income.”
“It’s not like you have to wear a badge or something,” Will Dunlap said, or that two-tiers “have to drink out of a different drinking fountain. It’s just that you know every day when you go in there that the life that these people have and made for themselves is never going to be anything that you have.”
It’s a reversal of fortune a lot of families here struggle with. And it’s certain to be an issue when the union and the car companies begin negotiations to replace their current contract, which expires next year.
THE MATH in September of 2010, according to General Motors:
Wages: Traditional workers at General Motors earn from $28.30 to $28.76 an hour. Workers in the skilled trades can make more. Tier-two workers earn between $14.65 and $16.28 an hour.
Retirement: Traditional workers at GM have a defined benefit plan, i.e. a pension. Tier-two workers have a defined contribution plan in the form of a 401K.
Vacation:Traditional workers at GM top out at 200 hours after 20 years of service. Tier-two workers top out at 160 hours after 15 years of service.
Health care: Among the differences, it takes tier-two workers at GM longer to become eligible for coverage.