Autoworkers Punting on New Agreements Despite ‘Historic’ Pay Raises

Recent negotiations between auto manufacturers and autoworkers’ unions in the United States have resulted in generous pay increases and enhanced benefits that have set new records. Despite these benefits, many United Auto Workers (UAW) members are still hesitating to sign the new contracts due to a number of lingering concerns. The new four-year contracts, signed by General Motors, Ford, and Fiat Chrysler, represent the largest pay increases in history for autoworkers, with 2.5% raises each year and $3,000 bonuses for most. In addition, the contracts include robust lump-sum payments for certain categories of workers, such as veterans, designed to close the wage gap between entry-level and experienced employees. New hires are offered skilled-trade job titles with higher wages, as well as elimination of traditional two-tier wage structures that created salary discrepancies between long-term employees and those that had been hired after 2009. Despite these gains, UAW members express a number of concerns about the new contracts, which include a fear of diminished job security and job outsourcing. The contracts also stipulate the transfer of certain work to Mexico and lower wage rates for newer hires, with top wages capped at around $28 an hour. In addition, union officials worry that scheduled plant closings and consolidations have left some workers feeling uncertain about their future. The delay in signing the contracts has left UAW in a precarious position as they struggle to bridge the gap between the union’s demands and the auto industry’s expectations. UAW members recently voted down the contracts for both Ford and Fiat Chrysler and have delayed ratification of General Motors’ contract, leaving union and management facing an uncertain future. In the end, the success of the contract negotiations between the UAW and the auto industry will ultimately depend on how both sides address the lingering uncertainties faced by union members. Only with a fair agreement that respects all of each party’s concerns can the UAW and the auto industry both reap the rewards of these record pay increases.