Pensions rally Nissan workers

The age issue
Employers across the industry are coping with tough issues of an aging work force
  • Young transplant workers are beginning to ponder their retirement.
  • Big 3 automakers have more retirees than active workers.
  • The UAW is pressing for more retirement benefits.
  • The stock market dive is erasing the gains of private retirement savings plans.
    By the numbers
    Average age of U.S. assembly workers General Motors 48 Ford 44 DaimlerChrysler 44 Nissan 39 Mercedes-Benz 38 Toyota 35

  • Retirement benefits are a rallying issue as the UAW appeals to workers at Nissan North America Inc.'s auto plant in Smyrna, Tenn. When the talk turns to retirement, union organizers there say they are finding a sympathetic ear from workers who had never shown an interest in unionizing.

    The union claims that Nissan is lagging on various benefits, including health care and pensions, and that some workers are concerned about how they will retire from the transplant automaker.

    But the issue is far from unique to Nissan.

    The industry is seeing its work force age, while employers are longing to increase productivity. Although auto companies are attempting to sweeten pension plans and retirement offerings, the mood has soured in the past year because of the faltering stock market and personal savings plans riding on it.

    "It killed me to see my 401(k) plan drop like it did this year," said one Saturn Corp. worker at Saturn's UAW Local 1853 union hall in Spring Hill, Tenn. "I just can't stand it."

    A generation of aging auto workers is close to retirement. The rising corporate cost of retirement and pensions will make its way into the retail cost of autos, warned Brett Smith, senior industry analyst with the Center for Automotive Research in Ann Arbor, Mich.

    "The cost of labor itself is not a huge factor for automakers," Smith said, "and the retirement part of that is even smaller. But somewhere down the line, it has to catch up with them. You can't keep taking the hit of an increasing cost without eventually passing it along to the consumer."

    Transplant youth

    Pension issues are an unlikely union rallying point at Nissan. For the past decade, Nissan and the other transplant automakers of North America have enjoyed an age advantage over the Big 3 - often cited as one of the reasons for the transplants' productivity advantage.

    While the nonunion transplant industry has hired young workers to fill its new factories in the South and Midwest, the Big 3 have been strapped with a UAW agreement that requires them to fill job openings from the ranks of laid-off workers.

    Last year, DaimlerChrysler said it would eliminate 26,000 jobs from its U.S. operations. According to a company spokesman, half the cuts made have come through early retirements.

    By contrast, the workers at Mercedes-Benz U.S. International Inc., DaimlerChrysler's nonunion auto plant in Vance, Ala., are an average age of 38. That is up from 35 when the plant opened in 1997. But Mercedes is in the process of hiring 2,000 workers for an expansion there.

    General Motors' last hiring wave occurred in the 1970s, and its workers are an average age of 48, according to the company. The average age at Nissan, which launched its first U.S. production line in 1983 and has been expanding since, is still below 40.

    "The age of workers has been going up a little for the Japanese automakers, but it's not to the Big 3 level yet," said Laurie Felax, vice president of industry research firm Harbour and Associates Inc. in Troy, Mich. "The Japanese still have a relatively young work force."

    GM's pension universe is dramatically different from Nissan's. While Nissan has few U.S. pensioners at all, GM is supporting about 330,000 retired hourly workers, or 2.7 retired factory workers for each working hourly employee.

    But labor professor Steve Babson, of Wayne State University in Detroit, said the age of factory workers is not a simple issue.

    "You might say older workers are less inclined to make that extra push for productivity," Babson said. "But you could also say the older worker is more experienced and has a greater capacity for troubleshooting on the assembly line."

    Dollar levels

    At Nissan, the UAW is focusing on the difference between Nissan's pension plan and plans at UAW-represented plants. Company officials are declining comment on the union campaign until it is over and could not respond to union assertions. But organizers there say while Nissan has long offered a defined benefits plan similar to the Big 3's, the value of the benefits has fallen out of step with UAW contracts.

    According to statements made by the union, Nissan pledges $32 a month in retirement pay for every year an hourly employee has worked. Based on that formula, a 30-year factory veteran would leave Nissan with a monthly pension check of $960.

    By comparison, the UAW contract calls for $46 a month for each year of service, giving a 30-year factory veteran a monthly pension check of $1,400.

    A Web site maintained by union organizers as part of the Nissan campaign offers viewers information on the UAW contract approved in August at New United Motor Manufacturing Inc. in Fremont, Calif.

    According to the site, NUMMI, a 50-50 GM-Toyota joint venture, has adopted a policy allowing workers with 10 years of service to retire at 62 with full pension and health benefits. The contract also won increased 401(k) contributions from the company.

    You can reach Lindsay Chappell at

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