the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Mar 6, 2024
Prior to workers voting on the UAW auto contract I put out a letter that gave my opinion on the contract.
But the following is a version of a report I did after the contract was ratified.
Like past auto contracts, workers are given the “highlights” of the contract before they vote. The full language of the contract was available online, but there is so much contract language to review that it is impossible to understand it all in the few days that workers have before they vote, even for someone like me who has a lot of experience dealing with union contracts.
I sent this report to workers I was connected to, and I kept adding to it as I found more information. I did it so workers could have a fuller understanding of what was actually in the contract and what it would mean for them going forward. More than anything, I wanted workers to understand that this auto contract was not the “record, historic” contract that the union leaders said it was and the media was more than willing to repeat this same propaganda. I also wanted to show what was not in the contract, especially concerning working conditions.
This report is also a warning about what the auto bosses have in mind for workers in the future, e.g., the terrible attendance policy in the Stellantis contract that Ford and GM are certainly planning for in the future.
—Gary Walkowicz
This summary was not intended to draw conclusions about whether workers should have voted Yes or No on the contract. It does not discuss the significance of having only a limited strike, like the one that was carried out. That discussion is in another article. This is simply an analysis of what was in the 2023 UAW auto contract.
The 2023 contract has been called a “record” contract, a “historic” contract. I do not agree. I started at Ford in 1974 and I know what autoworkers used to have, what we have now and what we have lost. There were some gains in this contract, but it did not restore all the concessions that were lost. This contract did not return autoworkers to the standard of living that we used to have, much less set a new “record” contract. I look at the wages and benefits in the 2023 contract, as well as working conditions, focusing mainly on production workers. I compare the 2023 contract to previous contracts. This summary covers the main issues, but not every part of the contract.
Note: wages and benefits and other contractual language vary somewhat between the three companies. The wage and benefit numbers and contract agreements I use are from the Ford contract, unless otherwise specified. Wages at GM are slightly higher. Wages at Stellantis are slightly lower.
The union negotiated the 2023 contract to expire on May 1, 2028, meaning this contract will last four years, seven and a half months, longer than any UAW contract with the Detroit Three auto companies for many decades. A longer contract is generally an advantage for the companies. The first UAW contracts with the auto companies were one year. When I started in 1974, contracts were three years. Starting with the 1999 contract, they became four years. Now, it is almost five years.
Workers who are already at full pay got an 11% raise immediately and then yearly raises of 3%, 3%, 3% and 5% for a total of 25% over the life of the contract. The UAW top leadership and the media used this 25% figure to claim it was a “historic” contract, but that was just propaganda to sell the contract. It’s true that we have not seen a UAW contract that totaled 25% raises over the life of the contract. But is also true that UAW workers had never fallen so far behind inflation, at least for many decades.
Based on the Consumer Price Index (CPI), auto workers’ hourly wages had fallen by 30% since 2009, relative to inflation, but they only got an 11% up-front raise.
Here is another way to measure how much autoworkers have lost to inflation and concessions. After the 2003 contract was settled, the basic wage for an assembler at Ford was $25.64 an hour. If we had stayed even with inflation, according to the CPI, Ford workers would be making $42.50 an hour today. After the 11% up-front raise in the 2023 contract, Ford workers are making $35.58 an hour. In other words, the hourly wage is almost $7 an hour less than what it should be, compared to 2003. To get even, they would have needed a 31% raise up-front, not 11%.
If the contract had put the 25% raise up-front, it would have put workers closer to catching up. By spreading the 25% over the whole contract, it reduces the value of the raises. And the raises do not make up the money that has been lost to inflation.
Cost-of-Living Allowances (COLA) were restored, the first time since 2009. However, the COLA raises, by themselves, will not keep workers up with inflation. First, COLA is based on the government Consumer Price Index, which doesn’t fully account for the prices that working-class people have to pay for their daily expenses. Second, the COLA raises come every three months, plus there is a one-month lag, while prices have already been rising. In other words, the COLA increases are always four months behind the price increases. You are always losing ground. Third, this contract allows the companies to hold back up to 10 cents of every quarterly COLA raise. During the life of this contract, workers could lose up to $1.80 per hour in COLA raises.
Compared to the 2019 contract, workers lose a lot of bonus money. The signing bonus was reduced from $9,000 to $5,000. Workers lose 4 yearly inflation bonuses of $1,500 each and lose two lump sum bonuses worth a total of about $5,500. That adds up to about $15,500 bonus money that is lost over the length of the contract, or about $3,300 a year. The formula for the profit-sharing bonuses was changed at Ford and was said to be slightly improved, but it is not clear what the change will mean.
There was a small negative adjustment in when workers will get their yearly raises. Historically, yearly raises start in September. In this contract, they start in mid-October, meaning one month less money for the workers, one month more money for the companies. Also note that the 5% raise comes in the last eight months of the contract, reducing how much money it will mean for workers.
For many years, autoworkers got a 3% raise every year, plus COLA. Those two things together allowed autoworkers to stay even with inflation, unless inflation was really high. But during the years of concessions, yearly raises were taken away, replaced by bonuses or by nothing at all. COLA was taken away. The result of these concessions was that our standard of living was significantly reduced. This contract does not get us back to where we were. The 11% up-front raise is not nearly enough to catch workers up. The yearly raises over the next four years, plus COLA, means that going forward, workers should probably stay even with inflation during the rest of the contract, unless inflation is really high. But it would not put workers back to where they should be.
The raises and COLA in this contract will be more than the lost bonus money, but lost bonuses will reduce the total amount of money gained in this contract.
The unknown factor is the profit-sharing bonuses. Profit-sharing bonuses have been relatively large the last few years. If that continues, then workers would make up some ground, though not enough to regain the same standard of living we used to have. Remember that profit-sharing could go higher, but it could also go down. Profit-sharing has been in the UAW contracts for over 40 years and there were some years when profit-sharing was Zero, and other years when it was only a few hundred dollars.
The profit-sharing formula was said to be improved in the Ford contract, adding the profits from Ford Credit, but also adding the profits or losses from outside North America. It remains to be seen how that will play out at Ford. Profit-sharing is unchanged at GM and Stellantis.
It should be remembered that profit-sharing was first negotiated in lieu of bigger hourly wage increases. Wage increases can be counted on to provide workers with a known amount of money, but profit-sharing varies every year. That’s why companies prefer it.
The biggest wage gains in this contract were for second-tier workers. First of all, workers at some plants and bargaining units had permanent lower wages, with no chance to get to the full production rate. These workers will now convert to the production rate of other Detroit Three workers and be able to reach full pay. That includes GM workers at GMCH, CCA and GM Subsystems; Ford workers at Sterling Axle and Rawsonville Components; and Stellantis workers at Mopar.
All the second-tier workers at the other plants and bargaining units were previously able to eventually reach full pay, but now they will get there faster. In the 2019 contract, those who had already been hired before the contract were moved to full pay during the 4-year contract, while those hired after the 2019 contract still had an 8-year progression. In the 2023 contract, it is called a 3-year progression to full pay, but it is actually three years and nine months. New hires have to start as temporary workers first. After nine months as temporary workers (assuming no break in service time), they become permanent employees. Then they still have to go through a 3-year progression to full pay. (They are called temporary workers at GM and Ford and called supplemental workers at Stellantis. Stellantis supplementals have a worse work situation and many of them were terminated after the contract was ratified.)
It’s worth noting that, in the past, the auto companies did not have the right to hire “temporary” workers. They hired almost everyone to permanent positions, so you worked your first 90 days on “probation” and then after 90 days you had full pay and seniority. I started working at 95% of full pay and had 100% after 90 days. The companies also used to hire a small number of people as “Temporary Part-Time,” who worked two days a week. They were mostly people who only wanted a part-time job. Hiring “temporary” workers to work full-time jobs and making everyone start out as “temporary” before you can get a permanent job was a major contract concession. It created a lower tier of workers who worked for less pay and benefits, have less rights, and can more easily be gotten rid of.
The starting pay for new hires also has lost a lot to inflation over the years. In 2007, the starting pay for a new hire was $19.78 an hour. Adjusted for inflation that would be $28.90 an hour today. Starting pay for a new hire in the 2023 contract will increase from $16.67 an hour to $21.00 an hour. After nine months as a temporary worker, they will become a full-time worker and be paid $24.91 an hour, which is still $4 an hour less than what new workers made in 2007, when adjusted for inflation.
There are other gains for 2nd-tier workers. They will gain another 40 hours of vacation time after 20 years seniority, so they will now have the same vacation entitlement as legacy workers.
There are some gains. Temporary workers will now get profit-sharing. Temporary workers will be eligible for the signing bonus, bereavement pay, and jury duty pay.
Temporary Full-Time (TFT) workers, as well as seniority workers, will get Short Work Week (SWW) and SUB pay after three months. Temporary Part-Time (TPT) workers are not eligible.
Temporary workers will be converted to permanent, full-time after nine months of continuous service at all three companies. However, Stellantis is planning to get rid of about 2,000 temporary workers (called supplemental workers at Stellantis) before they reach nine months. This information was not told to the workers until after they voted on the contract.
Workers hired after 2007 still will not have pensions, only a 401(k). The company increased their 401(k) contribution from 6.4% to 10% of workers’ wages (capped at 40 hours per week). The companies also contribute $1 per hour worked (capped at 40 hours per week) in lieu of retiree health care.
It is difficult to compare a 401(k) to a pension because there are factors that will vary for each worker. For example, how much the 401(k) increases or decreases in value will be based on Wall Street investments. How long will a worker and their spouse live after retirement? A pension continues to be paid as long as a retiree and their spouse are living, while a 401(k) can run out. What is clear is that a pension means a more secure and dependable income than a 401(k). Some younger workers today say they prefer a 401(k) because they can take it with them if they leave the company, even if they work less than the five years it takes to be vested for a pension. The contract includes options to convert money from a 401(k) into an annuity, but it is still a defined contribution, not a defined benefit.
What is a very big problem is that second-tier workers hired after 2007 still will not have retiree health care. Workers are not eligible for Medicare until age 65, which means if they want to retire before 65, they will have to pay for their own health care at the time they need it the most. Without a health care policy, one serious health care event could wipe out much or all of someone’s 401(k). To buy a decent health care plan for one person and a spouse can cost $1,500 to $2,000 or more a month and, on top of that cost, there will still be significant out-of-pocket costs. Even once a worker is eligible for Medicare, there are significant costs that Medicare does not cover, so people will still need to pay for supplemental health care coverage.
It was claimed that this contract got rid of tiers, but that is false. This contract is not “Equal Pay for Equal Work.” When I was hired, and for many years, workers reached full pay in 90 days. Some of the first concessions changed that to 1 ½ years. A later concession changed that to three years. The three years and nine months to full pay in this contract does not even bring things back to the 3-year progression that we had in the 2007 agreement.
While the value of having a pension versus a 401(k) may be debated, there is no debate that the lack of retiree health care means that all workers hired since 2007 are still in a lower tier.
“Legacy” workers (those hired before 2007) have not had an increase in their pensions since 2010. According to the government’s CPI, prices have gone up by 40% since then, meaning the value of the pensions has decreased by 40%. The 2023 contract increased monthly pensions for future retirees, but not current retirees, by $5 per year of credited service. Meaning that someone who works 30 years would have an increase of $150 per month. That is an increase of about 9%, which means future retirees will still be getting 31% less than they were in 2010, relative to inflation.
The last previous increase in pensions was in 2010. At that time, the monthly pension with 30 years seniority was $1,605.50. To keep up with inflation, it would have to be $2,258.19 today. The increase in the 2023 contract only brings retirees up to $1,756.50 a month, meaning they are about $500 a month behind where they should be, relative to inflation.
In addition, the retirement buyout in 2023 was $50,000 which is $10,000 less than in the 2019 contract. It will take about five and a half years for the increased pension to make up that lost $10,000.
That pension increase is only for workers who have not yet retired. Those already retired will get a $500 bonus each year of the contract, which amounts to $41 a month. Current retirees with pensions that are frozen are now about $650 a month behind where they should be to keep up with inflation.
For decades, the auto companies have been increasing their profits by making workers do more and more work. The companies call it “productivity” improvements. The companies will eliminate a job and add the work from that job on to the remaining workers. Over the years, hundreds of thousands of jobs have been eliminated this way, especially in assembly plants. The result is that many fewer workers are now producing many more vehicles. The human cost is exhaustion and broken bodies.
The language in the national contract on production standards is written in the companies’ favor. It doesn’t give local unions any real ability to fight speedup through the grievance procedure. Nothing changed in this language. Production standards is a strikable issue in the national contract. However, any strike vote requested by a local union must first be approved by the International Union (IUAW) and the IUAW has rarely ever approved a strike over production standards. They have not, at least for many years, initiated any campaign to fight speedup. As a union representative I tried to fight speedup and twice requested strike authorization from the IUAW. They did not grant the authorization and made it very clear that the IUAW had no intention to make this fight. Will the new leadership be ready to make a fight? So far, we have not seen any evidence of that.
The lack of a fight against speedup takes on even more importance because of what happened shortly after the contract was ratified. The Detroit Three all announced layoffs and Stellantis said it was planning to terminate around 2,000 supplemental workers. The companies claim that they are cutting jobs because of reduced production. But the companies have been cutting jobs for years through speedup, even when they did not reduce production and even when they increased production. If we want to save jobs and stop layoffs, the fight against speedup should be the first place to start.
Over the years, the companies have been allowed to add alternative work schedules (AWS), besides the “traditional” Monday through Friday schedule. One example of AWS is the seven days on, seven days off 12-hour-a-day schedule, which is often used for skilled trades. Ford has a lot of plants working the 3-crew AWS schedule –three crews working 4 days a week, up to 10.7 hours per day and the C crew working two days starting at 6:00 a.m. and two days starting at 6:00 p.m. There are other AWS allowed in the contract. None of these alternative schedules are healthy for peoples’ lives. The only change I saw in work schedules is that Stellantis got rid of their 3–2-120 schedule, which they were not using anyway, and got rid of the AWS letter for skilled trades. Nothing on alternative work schedules was changed in the Ford and GM contracts.
Mandatory overtime has always been a problem for autoworkers and nothing was done in this contract to address this. The contract allows the company to schedule mandatory Saturdays, mandatory Sundays on AWS, “emergency” overtime, model changeover period overtime, new plant overtime, new model overtime, new shift overtime and other overtime. The contract language allowing seven days a week overtime at “critical plants” was a big issue at Stellantis this year and was not fixed in the new contract.
In 2007, break time was reduced from six minutes per hour worked to five minutes per hour worked. That meant on an 8-hour day, break time was reduced from 48 minutes per day to 40 minutes per day. On a 10-hour day, break time was reduced from 60 minutes per day to 50 minutes per day. The concession on break time was continued in this contract.
When negotiations began, the UAW leadership said they put on the table a proposal of 32 hours work for 40 hours pay. The companies cried that this was impossible. And maybe the UAW leadership was not serious about this proposal. But the truth is, more time off work is something that workers actually fought for and partially won in the past. In 1979, we had nine PPH days (Paid Personal Holidays) in our contract. That meant, on top of vacation and holidays, every worker got nine additional days off every year (one day a month, except in the summer). This was a move toward a shorter work week for auto workers and it also created more jobs. We lost PPH days in one of the first concessions.
Some of the relatively easier jobs in the auto plants like clean-up were once jobs that belonged to UAW production workers. It was a job that higher seniority workers were able move to, so they could get off the line and finish out their time before retirement with jobs that were less physically strenuous. But those jobs were outsourced to other companies that pay lower wages. Those cleanup jobs are often UAW-represented, but UAW production workers can’t get those jobs and the clean-up workers are stuck on jobs that pay poverty wages. This issue was also not addressed in this contract.
At one time, the UAW contracts included a Jobs Bank, where workers who were indefinitely laid off were paid 40 hours pay per week, instead of unemployment and SUB. The Jobs Bank was eliminated in one of the concession contracts and did not return in this contract.
There was nothing in this contract to improve working conditions. To me, it is the biggest thing that is lacking because working conditions for auto workers are bad and have been getting worse. When you combine speed-up, forced overtime, unhealthy work schedules and not enough break time it adds up to conditions that mean auto workers are exhausted coming out of the plant every day and their bodies are breaking down with repetitive motion injuries and other physical problems. After the contracts were ratified, company bosses made it clear that they plan to make up any raises in this contract by pushing for “productivity and efficiency,” in other words, more speed-up.
If the auto companies build more electric vehicles, they will be building fewer gas-powered internal combustion engines (ICE), which means they will need fewer engines and transmissions. What happens to the jobs of workers in engine and transmission plants? The UAW leadership tried to address this issue by putting the battery plants under the UAW Master Agreement and giving laid-off UAW workers the right to transfer to the battery plants. The language that was agreed to in these contracts only answers some of these issues and leaves a lot of things open, including working conditions.
Only one of these battery plants is currently open (the GM Ultium plant in Ohio). When other plants open, they will still have to gain union recognition through an NLRB vote or a card check process. Secondly, the locations of these planned are mostly not close to the engine or transmission plant where workers might be laid off. In many cases, laid-off workers would have to move hundreds of miles or to another state to work in a battery plant.
The contract language also is not the same for the three companies. In the GM contract, the one battery plant that is already operating and future battery plants will be placed under the UAW Master Agreement, but workers are only guaranteed to get paid 75% of the full GM wage. Anything more than that will have to be negotiated.
In the Ford contract, Ford would lease workers to the Marshall, Michigan battery plant at the same pay and benefits, but the battery plant would have its own rules, “operating practices and patterns,” notwithstanding the Master Agreement. UAW workers could
transfer to the Tennessee plant and other Ford-owned battery plants and keep their same wages and benefits, but the UAW still has to win union recognition.
The Stellantis contract agreement on battery plants says that some current Stellantis employees will be able to transfer to battery plants. New hires into the battery plants will be paid a lower wage rate, subject to future bargaining.
While the attendance programs at Ford and GM changed only slightly, the new attendance program in the Stellantis contract is much worse and certainly will lead to more people being fired. Discipline for several infractions are combined into one attendance procedure. Workers will get points for each day of unexcused absence, points for being late, points for not calling in on time when they will be late or absent. Points will range from 0.5 to two points for each of these infractions and the points will be added together. Workers will get terminated when they get nine points.
Also in the Stellantis contract, workers will now be forced to use half of their personal time and half of their vacation time when they miss days due to an FMLA-covered illness. That means they will have fewer paid days off to use when they need them for other reasons. In the past, when workers took an FMLA day, they had the option of whether to use vacation or personal time or take an unpaid day. Also, the company now will automatically count a paid medical leave of absence against a worker’s FMLA entitlement. In past contracts, the company was not allowed to do this.
This attendance procedure is terrible and certainly doesn’t speak to a better work-life balance for Stellantis workers. It makes things worse.
Over the last couple decades, the reduction in wages and benefits and the imposition of 2-tier has meant a steady reduction in the standard of living for autoworkers. Working in an auto plant was never easy, but working conditions have been getting worse. While there were some monetary gains in the 2023 contract, it did not change that situation. Under this contract, autoworkers will continue to live at a lower level than they were when I first started working at Ford. The statistics on wages and benefits clearly show that. But over the years, I have also seen it reflected in another way.
For many autoworkers today, one income is not enough to provide for them and their families. Jobs at the Detroit Three auto plants used to be one of the best-paying jobs for industrial workers. But today many auto workers are working a second job or are making some money on the side. Or they are depending on a second income in the family, not because they necessarily choose this but because they are forced to. That was not so much the situation when I first hired.
I can say the same thing about retirees. After working (I should say surviving) 30 years in an auto plant, people deserve a comfortable retirement. But today I see more and more retirees working at a part-time job to get by.
The auto strikes this year and in 2019 were important. After almost 40 years of seeing no resistance to the companies’ attack on our standard of living, auto workers began to fight back. These strikes meant that autoworkers were able to make some small gains or at least not lose anything more. If there was no strike, workers would have gone backward even more.
We didn’t get what we need, but we can learn from this strike. To get what we need and deserve, it will take an even bigger fight than we saw this year. Every worker, no matter where we work, in a union or not, deserves more. We all have a reason to fight for more. In the future, we have to find the way to bring more workers into the fight and find the way to bring those fights together. By using all our power, we can fight for a better future for all workers.
Gary Walkowicz
45-year Ford employee at Dearborn Assembly and Dearborn Truck (now retired)
8-term elected UAW representative
Former candidate for UAW International President