UAW Chief Rejects Lower Wage Tier

The current two-tier UAW wage system, installed in 2007, pays veteran workers $28 per hour, while pay for newer employees is capped at $19.28 per hour.

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The president of the United Auto Workers union rejected a new wage tier Wednesday after reports indicated U.S. automakers could float the idea during upcoming contract talks.

"I'm thinking they got too many damn tiers now," Dennis Williams told union members at their bargaining convention in Detroit.

The current two-tier UAW wage system, installed in 2007, pays veteran workers $28 per hour, while pay for newer employees is capped at $19.28 per hour. UAW officials signaled closing that gap, as well as a general wage increase, would be a priority during negotiations over a new contract with the "Big Three" automakers.

"The UAW will never abandon the principles on which we were founded," Williams said. "We believe in a fair day's work for a fair day's pay, and we believe in equal pay for equal work."

Sources told Bloomberg, however, that GM and Ford could instead seek a new, lower tier in an effort to reduce labor costs after the current contract expires in September. A report this week showed average labor costs for GM and Ford were considerably higher than most other carmakers operating in the U.S.

Although Williams opposed the idea, he also cautioned members that General Motors, Ford and Fiat Chrysler must compete in a global economy.

“I truly believe that the companies we deal with know that we can be both creative and thoughtful,” Williams said. “But make no doubt about it, they also know that as we share in the bad times, we must equally share in the good times.”

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