GM, Ford to Ask UAW for New Lower-Pay Tier in U.S.
U.S. automakers General Motors Co and Ford Motor Co are considering asking the United Auto Workers union to create a new tier of lower-paid union workers in their U.S. factories, Reutersreported, citing people familiar with the matter.
The UAW currently has a two-tier wage system, that includes top-paid $28-an-hour assembly workers and the lower-paid second tier, whose wages top out at $19.28.
The automakers would be pushing forth for a third tier wage system for certain lower-skilled jobs, Bloomberg said.
"For the 2015 negotiations, we're open to discussing many different solutions with our UAW partners that will allow us to continue to employ a competitive labor rate and add U.S. jobs and investment," Ford spokeswoman Kristina Adamski said in a statement.
Ford's hourly labor costs were $57, just behind GM's at $58. FCA's U.S. workers averaged $48 per hour.
A new pay rate for lower-skilled jobs would help the automakers bring down labor costs as they compete with Asian and European rivals that pay less at non-union U.S. plants, the report said.
GM and Ford have much higher labor costs than their cross-town rival Fiat Chrysler Automobiles, according to a study released just ahead of a meeting of United Auto Workers officials as they prepare for contract talks with the Detroit Three.
GM's U.S. auto workers on average earn about 21 percent more in wages and benefits than their counterparts at Fiat Chrysler, reflecting the much higher percentage of lower-paid, entry-level workers at FCA, according to a study of 2014 labor costs by the Center for Automotive Research.
"We aren't going to comment on potential topics in upcoming negotiations... we are committed to working with our UAW partners on solutions that will benefit employees and improve GM's competitiveness," GM spokeswoman Katie McBride said in an email.
UAW could not be reached outside business hours.
More Industry

Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →
Texas Dealership No Longer in the Family
The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.
Read More →
Genesis Grows California Presence
The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.
Read More →
August Auto Sales a Mixed Bag
An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.
Read More →
EV Market Humming Along
July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.
Read More →
Auto Loan Delinquency Rates Stabilize
Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.
Read More →
EV Sales Recover in Q2
The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.
Read More →
The Cheapest Hybrids to Fuel
The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.
Read More →
Hybrids and SUVs Gaining Ground
The most recent Kelley Blue Book Brand Watch found that only two nonluxury brands increased in shopper consideration, buoyed by their hybrid and SUV offerings.
Read More →