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Some Ford Tier 2 workers get a bump up to Tier 1

Feb 4, 2015

Ford's contract with the UAW sets a 20% cap on the number of employees it can hire at a lower starting wage known as Tier 2. After it exceeds the cap, it must begin moving employees into the higher wage known as Tier 1.
Credit Ford Motor Company

Between 300 and 500 Ford Motor Company workers will soon be getting a raise - a big raise.

Ford is bumping the workers from the so-called Tier 2 starting wage, now about $19.50 an hour, to the Tier 1 wage of $28.50 an hour.

Ford's contract with the UAW sets a 20% cap on the number of employees who can be paid Tier 2.

Ford has exceeded that cap with Wednesday's announcement that it will hire 1,550 additional workers to build the new F-150 truck.

Bruce Hettle, Ford's Vice President of Manufacturing in North America says Ford and the UAW are still figuring out who will get the bump.

But "most have a sense of where they are on the list, because they all understand when they hired in, and those that hired in in the beginning of the contract would turn first."

General Motors and Fiat Chrysler Automobiles do not have caps on the Tier 2 workers they can hire, because the UAW made concessions due to the companies' 2009 U.S. bankruptcies.

The two tier wage structure is certain to be a big issue during this year's contract negotiations with the UAW.  That wage structure lowered the companies' labor costs, so they are now similar to labor costs for Honda and Toyota in the U.S.  But some in the UAW feel the lower starting wage is unfair and want to eliminate it.