Sunday, May 5, 2019

Big automotive strike coming up?

The rumor on the street is that the automakers are preparing for an epic strike.

They are stuffing the distribution channels so there will have product to sell.

One of the issues that is coming to a head is the two-tier pay system as the younger employees will soon out-numbering the legacy employees.

In very round numbers, the base pay of the legacy employees is $30 an hour.

In very round numbers, the base pay rate for those hired after September 2007 is half that.

When the number "tips", look for the younger employees to make the consolidation of the two tiers a "demand" and that the new base pay rate be something like $23/hour for all employees regardless of hire date.

Look for the Big Three to try to stiff the demand. Why should they ratchet the pay of younger employees when they are quickly replacing the $30/hour group? That would defeat the purpose of the lower rate.

For the sake of reference, a typical "factory" job in a local non-Big Three factory runs about $12 an hour. The $15/hour represents a 25% premium over that $12/hour. Expect the companies to invite the workers to leave if they think they can do better elsewhere. Of course they won't.

3 comments:

  1. And watch the Union starting blowing smoke up the membership's backside about how they can force the Big 3 to pay higher wages with a strike. If the membership is smart, they won't buy into the BS and take what they can get. Cause the Big 3 can take those jobs anywhere in the world and pay a half to a quarter of what they are paying now.

    Boeing would figure out how much they were willing to spend over the life of a contract period. Once they had spent all they were going to spend on labor costs, there would be mass lay-offs.

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  2. ...lost any remaining respect for *the union* when they approved that b.s. two tier pay system. I don't think the lower tier workers have the guts that the *old guys* had when it comes to striking the general.

    Of course, the general is run by a woman and she may not have the guts of the *old guys* that managed to create a G.M. in the first place.

    Thanks for the heads up. This may be interesting.

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  3. And the fallout will be on us suppliers.

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