Temps made permanent at GM and Ford plants, but UAW wants more
Flint — Lucy and Keith Shinabarger are planning to take their first family vacation in a long time.
The Flint couple and their sons Jerald, 19, Blake, 6, can make plans now that Lucy has been boosted to full-time permanent status after more than three years working the line at General Motors Co.'s Flint Assembly plant. The transition gives her actual paid vacation days and a sense of security that when she comes back from vacation there will be a job waiting for her.
Blake Shinabarger, 6, with mother Lucy Shinabarger, dad Keith Shinabarger and brother Jerald Shinabarger at their home in Flint. Lucy became a full-time permanent worker at GM Flint Assembly last week. (Photo: Daniel Mears, The Detroit News)
“We are actually looking at a cruise,” Keith said, noting that they've narrowed down the list to Alaska or the Bahamas — or perhaps a Disney Cruise to surprise Blake.
Securing a path to permanent employment for temporary employees was a main goal for the United Auto Workers during 2019 negotiations with the Detroit Three. It was one of the issues that led to a 40-day national strike by the UAW against GM. By the end of negotiations, the UAW was able to secure that pathway.
Last week, more than 1,500 temporary employees at GM and Ford Motor Co. with three or more years experience were converted to full-time status, giving them wage boosts, better health-care benefits and most importantly, job security.
“You know you are going in there every day,” Lucy said.
At Fiat Chrysler Automobiles NV, temporary employees also have a pathway to full-time status and top wages. The UAW has said that 3,800 Fiat Chrysler temporary employees should become full-time this year.
The conversions are product commitments made before and during the national contract negotiations, UAW spokesman Brian Rothenberg said.
Fiat Chrysler's contract with the union doesn't set conversion dates the agreements at Ford and GM.
Fiat Chrysler will reclassify temporary workers at its new Detroit assembly plant comes online later this year, a company spokesperson said. The company has not said how many.
Temporary employees at all three automakers are used as floating workforces to fill in for the full-time workers on sick days or vacations. At the time of the negotiations last fall, temporary employees represented 7% of all UAW-GM hourly employees and 6% of UAW-Ford workers. Fiat Chrysler's temporary employees represented 13% of the hourly workforce, not including skilled trades.
Unions aren't keen on the use of temps because it creates a division in the workforce in which temporary employees earn less, said Marick Masters, who is on the business faculty at Wayne State University.
Masters believes the union achieved a “significant accomplishment” for temporary workers during negotiations, but said if absenteeism isn't addressed, a floating workforce always will be necessary.
“The company s to have as much flexibility in terms of hiring temp workers to handle unexpected absenteeism, turnover and just fluctuations in productivity,” Masters said. He believes it will be a delicate balancing act between what the union and the company want.
For GM, transitioning the temps will “help create more engaged and motivated teams in our plants, which is foundational to improving job satisfaction, health and safety, and the quality of our products for our customers,” GM spokesman David Barnas said in a statement to The Detroit News.
Issues at Fort Wayne
GM converted more than 900 temporary employees across 30 facilities last week, but the UAW is still pushing the automaker to reclassify other workers the union says should have been made full-time. GM expects there will be more regular full-time employment opportunities in coming months.
“We remain in conversations with General Motors at several locations where we believe additional members should be moved to seniority status under the agreement,” UAW Vice President Terry Dittes said in a statement. “This is a good start to a defined path for UAW members, but the UAW will be vigilant to make sure that all hardworking temporary employees see their advancement to seniority status.”
GM's Fort Wayne Assembly truck plant in northeast Indiana is one location where the UAW believes more temporary employees should have been made permanent. UAW Local 2209, representing workers at the plant, had 148 temporary employees converted to permanent status but the union believes there should have been more.
The union local and GM could not reach an agreement for 240 temp jobs at the Fort Wayne plant. With no agreement between the UAW and GM in place before their contract expired Monday, those 240 temporary employees were laid off.
“We were willing to retain approximately 240 additional temporaries as part-time employees but unfortunately we could not reach an agreement with the UAW,” Barnas said.
In a Local 2209 Bargaining Committee Report, shop chairman Rich LeTourneau wrote: “It will remain our position, if this company needs you to run, then they need to hire you.”
Elation at Flint
The mood is much different for 255 temporary employees at GM's truck plant in Flint. They were happily surprised last week when they learned they would become permanent.
The Flint Assembly workers who received that news at a Jan.
5 union meeting were classified as part-time temporary employees, and according to the union contract wouldn't technically be eligible for permanent employment until January 2021.
All of the workers at the meeting thought they were actually just going to be made full-time temps. But then Flint Local 598 Shop Chairman Eric Welter said: “You’re seniority employees as of tomorrow.”
He said the room “just erupted and everyone went crazy. It was quite a special, emotional event.”
Un Fort Wayne's union local, the one at Flint was able to reach an agreement with GM outside of the UAW's national agreement to get its temporary members hired permanently.
The announcement left Flint Assembly worker Brian Kiesling elated. Kiesling, of Flushing, had worked almost four years as a temp, dealing with struggles of not knowing how many hours he would have from one week to the next. The fluctuating paycheck for years prevented Kiesling and other temps from making major purchases or financing anything.
“A lot of people don’t realize how hard it is,” Kiesling said.
Brian Kiesling plans to put a new roof on his house now that he is a full-time employee at GM Flint Assembly plant. He worked for more than three years as a temp and last week had his status changed. (Photo: Photo courtesy of Brian Kiesling)
At GM plants, the transition for temporary employees means that an employee getting $17.53-$19.28 per hour would get bumped up to $21, according to the UAW/GM agreement. They got an improved medical plan cost-share and access to dental and vision coverage. The company will now contribute to their 401(k) plan, and they get life insurance and disability coverage.
The improved health care plan is what Kiesling most needed. Now 43, he worries about coming health problems. He's also relieved to have more job security. As a temp, he worried about missing any days and losing his job.
“You could have to start all over again,” he said. “It’s so disheartening something that that could happen.”
With a newfound sense of security, Kiesling plans to put a new roof on his single-story ranch and he has other plans: “I would to someday own one of our trucks.”
Chantese Wortham of Flint, who worked the line at Flint Assembly for more than three years as a temp, was often hesitant to sign up her four children for extracurricular activities because she was unsure she would have the money to afford them because her hours varied week to week. That will change now that she has a guaranteed full-time permanent job.
Chantese Wortham recently became a full-time employee at General Motors Co. Flint Assembly plant after working more than three years as a temp. The United Auto Workers went on strike against GM last year in part to get temps a path to permanent employment.
Chantese's husband, DaVonté Wortham, and children, DaVonté II,9, CayDence, 7, and Kassidy, 5, joined her on the picket line in the fall of 2019. She's looking forward to getting her children in gymnastics and karate classes now that she works full time.
(Photo: Courtesy of Chantese Wortham)
“I can put them in gymnastics or karate,” she said. “We are planning a vacation. We are going to take them to Disney World next year.”
Temps feel 'blessed'
Ford Motor Co. employee Dvaughn Fisher recently became a full-time employee at the Dearborn Truck plant. Fisher is thinking about getting braces with his new health insurance. (Photo: Courtesy of Dvaughn Fisher)
Ford converted 592 temporary employees to permanent status last week. Most will see their wages increase to $18.41 per hour immediately. Temps at Ford start out at $15.78. They will also see their health coverage improve and have more job security.
Ford Dearborn Truck employee Dvaughn Fisher of Monroe is now looking at getting braces for himself with his new dental insurance, but he's mostly excited to get off the “roller-coaster ride” of job uncertainty.
“It was a blessing. It means a lot for me,” he said. “I'm going to save my money and the use the rest if I need it.”
Temporary workers are grateful to the union and its members for fighting for them.
“The majority of us temps have a lot of faith in the union. Our union always takes care of us temps,” said Lucy Shinaberger, the Flint worker who's planning the cruise vacation.
The Shinabargers are an auto-plant family. Keith has worked at Flint Assembly for 25 years. He leads the launch team for the new heavy-duty trucks there. Keith's dad worked for GM, and Lucy's dad did, too.
Lucy followed their paths in 2016 when she hired in as a temporary employee at Flint. From the start, the union and GM told her they could not promise she would become full-time. She stuck with it, hopeful it would work out.
Now, in addition to vacation planning, Keith and Lucy are contemplating taking care of the house projects at their cozy colonial that they've put off.
“We have been wanting to fix up the house,” she said, “but do you dare spend that money?”
She will now.
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If You Thought Strike Was Bad for GM, Look at Ford and Chrysler
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The outcome of the UAW strike on GM will have big implications on labor negotiations at its main American competitors, Ford and Chrysler.
There are plenty of puts and takes in the tentative deal the United Auto Workers struck with General Motors Co. (IW500/5) this week, but this much looks clear: Detroit carmakers dealing with already-higher labor costs than their international foes risk becoming even less competitive.
GM’s labor costs will rise $100 million a year just due to the increases in worker pay, which “could be an even bigger headwind” for Ford Motor Co.
(IW500/3) and Fiat Chrysler Automobiles, according to RBC Capital Markets analyst Joe Spak.
And that doesn’t even account for the cost of continuing the union’s generous health care coverage — a tab Ford expects to rise above $1 billion next year.
“The economics of the deal look really attractive for the GM workers,” said Colin Lightbody, a former labor negotiator for Fiat Chrysler who’s now a consultant in Windsor, Canada. “This agreement will increase the competitive labor cost gap.”
GM’s average hourly labor costs — including wages, benefits and other expenses — were already about $13 above what international automakers such as Toyota Motor Corp. and Honda Motor Co. pay workers at their U.S. plants, according to the Center for Automotive Research. Ford’s costs are $11 an hour higher, while Fiat Chrysler pays a $5 premium.
The UAW will begin the process of ratifying its proposed contract with GM on Saturday, with workers casting ballots at locals across the country through Oct. 25.
Assuming the deal goes through, the union will turn its attention to either Ford or Fiat Chrysler next.
While the two companies will look for ways to tailor an agreement to their unique needs, the union will seek to broadly follow the economic pattern established by the pact with GM.
GM is seeking to offset wage concessions with buyouts of higher-cost production workers. It’s offering $60,000 early retirement payouts to as many as 2,060 employees.
Even if overall labor costs still go higher, it may be worthwhile as long as the automakers’ deals with the union give them room to maneuver on where models are manufactured and when output needs to be curtailed.
“They got the ability to continue to run the company without the union telling them what they can produce and where,” said Art Schwartz, a former GM labor negotiator who is now a consultant in Ann Arbor, Michigan.
Ford’s bargaining team is ly going to understand that concessions are “part of doing business” with the UAW, said Arthur Wheaton, director of the Worker Institute at Cornell University.
“The wild card is Fiat Chrysler, because it’s all new people at the bargaining table,” he said.
Fiat Chrysler Chief Executive Officer Sergio Marchionne, who died last year, played an important role in past contract talks with the UAW. Other key negotiators for the company and the union have retired or been implicated in an ongoing corruption scandal.
Sparser Signing Bonuses
There’s no desire at Ford or Fiat Chrysler to stomach a strike of the sort UAW has staged at GM. That walkout will last almost 40 days if GM’s 48,000 workers ratify the proposed pact next week.
The UAW issued statements earlier this month citing progress they were making with Ford and Fiat Chrysler while the GM deal was being hammered out.
Should the two companies succeed in avoiding a strike, they might save some money by paying smaller signing bonuses — they wouldn’t have to essentially compensate workers for wages lost during a walkout, as GM is doing with its record $11,000 ratification reward.
Four years ago, Fiat Chrysler went first in negotiations and paid roughly half the signing bonus of its rivals. Now that the company is more financially fit, it’s unly to get away with as big of a discount.
“I can’t see the UAW allowing FCA to go down 50% anymore, because their margins are pretty good now,” Lightbody said. “They’re gotten close to GM and Ford.”
Health care remains the most intractable cost as it reaches record levels of more than $20,000 a year for family coverage, according to a study by the Kaiser Family Foundation.
While the average American worker contributes 30% of the premium for family coverage, UAW members pay for just 3% or 4% of their insurance plans, according to the automakers.
During bargaining, GM quickly rescinded a request to have workers cover 15% of their medical coverage and have left it to others to cut that cost. The UAW zealously defends its health care benefits, viewing them as compensation for giving up raises and jobs for years as the Detroit carmakers struggled to survive.
Another concession the UAW won from GM is on the use and treatment of temporary workers, who’ve populated plants in greater numbers since GM and Chrysler reorganized in government-sponsored bankruptcies in 2009. They now represent almost 10% of the roughly 150,000 unionized workers at the Detroit Three.
GM agreed to give temps a path to permanent employment and more vacation days, and the highlights of the automaker’s agreement states the UAW will have stronger oversight over their use. While it’s possible the company negotiated wiggle room in this regard to keep a steady stream of at-will cheap labor on hand, the fine print of the proposed agreement hasn’t been made public.
The cost of this compromise could fall hardest on Fiat Chrysler, which has the most temporary workers, Wheaton said. In the end, though, both Fiat Chrysler and Ford are ly to settle for paying a little more than planned rather than risk disrupting the flow of fresh models into a shrinking U.S. auto market. Labor only accounts for 5% of the cost of a car, Wheaton said.
“When you’re fighting over only 5% of the cost, you have to ask yourself: ‘Why are we doing this?’” Wheaton said. “Why risk a billion to save $100,000?”
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The drop of 97,000 from the prior's week's upwardly revised figure was much better than analysts forecast.
New filings for regular unemployment benefits in the United States dropped to 684,000 last week, the government said Thursday, their first reading below 700,000 since the pandemic sparked mass layoffs.
The drop of 97,000 from the prior's week's upwardly revised figure was much better than analysts forecast and comes as COVID-19 vaccinations offer hope the economy can recover this year.
But, in a sign of the virus's ongoing toll, 241,745 new claims were received in the week ended March 20 under a special program for freelance workers, the Labor Department said.
That was nonetheless nearly 42,000 less than the week before, and though analysts acknowledged the crisis is far from over, the economy may finally be on the path to a sustained decline in joblessness.
“We're guessing that each week sees some firms either downsizing further or throwing in the towel, unable to hang on until the economy reopens,” Ian Shepherdson of Pantheon Macroeconomics said.
“This gradual attrition should not last much longer; we expect claims to fall sharply as the economy reopens fully across the second quarter.”
Regular claims nonetheless remained above the worst level of the 2008-2010 global financial crisis more than a year into the pandemic, and totaled 925,745 last week if those filed under the Pandemic Unemployment Assistance program for gig workers are included.
As of the week ended March 6, the latest for which data was available, almost 19 million people were receiving some form of aid, the data said.
The data also showed continuing claims, meaning people actually receiving benefits, dropping 264,000 in the week ended March 13 to nearly 3.9 million, and the four-week average of claims dropped 137,250 to nearly 4.1 million.
“Progress in jobs recovery is assured over coming months on wider vaccine distribution and a resumption of more normal business operations, especially in the COVID-sensitive service sector, which will bring back jobs,” Rubeela Farooqi of High Frequency Economics said.
However, she warned that the recovery could be lengthy, “given permanent job loss from business closures and a shift to technology could be constraints in a post-pandemic economy.”
Copyright Agence France-Presse, 2021