GM's goal: All 2nd-tier pay for workers at Orion plant

[Bozita]

Source: Detroit Free Press

POSTED: OCT. 16, 2010

GM's goal: All 2nd-tier pay for workers at Orion plant
Many laid-off workers offered jobs at GM's Lordstown plant
BY CHRISSIE THOMPSON
FREE PRESS BUSINESS WRITER


General Motors eventually wants to pay all of the workers at its Orion Township assembly plant a lower, tier-two wage so it can affordably build small cars, such as the Buick Verano compact and Chevrolet subcompact.

The UAW and GM agreed that 40% of the workers at the Orion plant will be paid the lower wage, which is about half of the $28 that the tier-one workers make, in an effort to keep GM and its Orion plant viable and competitive -- and to bring assembly work slated for overseas to the U.S.

That deal so angered union members that they plan to protest today outside of UAW headquarters in Detroit.

But GM eventually intends to replace all the tier-one Orion workers with lower-paid workers, Mike Dunn, chairman of the Orion local union, said in a video Webcast on the Local 5960 Web site. GM is offering some tier-one workers transfers out and will eventually hire only lower-paid workers. "We have become 'red circle,' " Dunn said. "No other tier ones will be able to transfer into Orion."

Read more: http://www.freep.com/apps/pbcs.dll/article?AID=/20101016/BUSINESS01/10160359/1319/GMs-goal-All-2nd-tier-pay-for-workers-at-Orion-plant&template=fullarticle

[PSPS]

1. Ad campaign: "Buy the cheap Orion - Made with the cheapest material, labor and quality we can find!"

Never mind that, thanks to Reagan's thirty-year-war on the middle class, that's all you will be able to afford. Now, hurry up and die already.

[Retrograde]

2. And yet, no one talks about lowering CEO's pay to make them competitive (n/t)

[pattmarty]

3. Excellent point.

[Brickbat]

7. Because "we need to pay competitive wages to get the best talent!" applies only to CEOs.

The rest of us are interchangeable.

[Tansy_Gold]

12. Ding! Ding! Ding! Ding! You win today's Golden Glob Award

From



Tansy Gold

[4lbs]

4. Why doesn't GM just raise the selling price of the cars by $56 to offset?

I'm sure $56 won't be a deal breaker for American consumers that want to buy a GM car.

Going from $28 per hour to $14 per hour (a 50% pay cut!) means $14 less per hour per worker at these plants.

Consider the 2000 hour work year (50 weeks at 40 hours per week), and 1000 total workers that will be affected by this.

That means $14 per hour * 2000 hours per worker * 1000 workers, or a total of $28 million dollars "saved" by GM from this manuever.

They produce what, 500,000 cars, at these plants annually?

Divide $28 million by 500,000, and you get.... $56.


So, why doesn't GM just raise the price per car it sells by $56 and then all its workers at these plants can have their $28 per hour pay?

That's much better than cutting a worker's pay by $28,000, or 50%.

[luckyleftyme2]

13. GOOD IDEA

BUT YOU DON'T EXPECT THOSE CEO GEEKS TO BE ABLE TO CALCULATE DO YOU?
HELL MOST OF THEM WERE CHAUFER DRIVEN FROM BIRTH!

[provis99]

5. yet labor already makes up less than 3% of their costs.

How about cutting executive salaries instead?

[4lbs]

6. GM could raise the price of each car it sells slightly and allow its workers more pay.

GM sells about 8 million cars per year.

They have about 90,000 union workers making them.


So, raise the price per car by $100. At an average price point of about $20,000 per car, a $100 increase is a half-percent or less increase. Barely noticeable.

However, doing so will bring in an extra $800 million to GM.

Use that $800 million to give each of the 90,000 union workers an extra $4.00 per hour. That comes to an extra $8000 per year per worker.

90,000 union workers working 2000 hours per year (50 weeks at 40 hours per week) is 180 million hours of labor.

Divide $800 million by 180 million hours and you get about $4.44 per hour (4.444444 per hour to be exact).

Give the workers an extra $4.00 per hour, and GM can keep the 44 cents per hour (which amounts to about $79 million more in 'profit' for GM).

[boppers]

14. Pensions and Healthcare and Dental...

Hm...

[Metta]

8. Virulent class warfare and robber baron tactics.

The points about ceo's salaries and workers' pay as % of costs is well taken and unaddressed by them. Happy karma, GM.

[Desertrose]

9. Wait...so "we" bailed out GM so they can turn around and cut "our" wages?

IS that about right...."our" money paid to cover their asses and then they have the goddamned balls to turn around and tell us they have to cut workers salaries...by half!?

Yeah, let the damned CEOs take it our of their salary.

[Enthusiast]

10. Race to the bottom.

That is what all this free trade shit has brought us.

[boppers]

15. Global equality is a bitch.

Americans have been so filthy rich, for so long, that living like the rest of the world does is a fairly brutal change.

[Cal Carpenter]

11. And the workers are pissed - related thread here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4577492