UAW-represented employees at a Lear Corp. seat plant in Indiana ratified a new contract today ending a wage structure that pays new-hires less than their veteran colleagues.
UAW Local 2335, in a statement, did not release the vote count but said the pact was ratified "overwhelmingly."
“The tide is turning for auto parts workers, who for too long have been stuck with fast-food-like wages,” Local 2335 President Jaime Luna said in the statement.
“The agreement is a victory not just for the workers at our plant, but for thousands of auto workers across the country who do the same hard work we do and will benefit from the higher standard we achieved by taking a stand.”
Union leaders see the vote as a potential springboard to similar agreements beyond the one governing the 760 UAW employees at the Lear plant. Jerry Dias, president Unifor -- the largest auto workers union in Canada -- said he hoped the vote signaled the UAW’s desire to end so-called two-tier wages when it negotiates new four-year contracts with the Detroit 3 next year.
Ending the two-tier system was named a top priority by new UAW President Dennis Williams at the UAW Constitutional Convention in Detroit in June.
Under the new contract at Lear, all workers at the seat plant in Hammond will eventually be able to earn a maximum wage of $21.58 an hour. Under the old contract, veteran workers earned about $20 an hour vs. $16 for two-tier workers, the Associated Press reported last week. The hires under two-tier were never going to be able to catch up.
Two-tier is divisive on the factory floor because it pays new employees lower wages and benefits than veteran co-workers for doing the same jobs, Dias said. The UAW and Chrysler Group, General Motors and Ford Motor Co. are expected to begin negotiations in earnest in January.
The Lear hourly workers staged a one-day strike a week ago before the tentative agreement was reached. The strike caused minimal production losses at the Ford factory in Chicago that it supplies.
The plant builds the Explorer SUV, Taurus sedan and Lincoln MKS sedan.
The union accepted the system at the Detroit 3 in 2007 as part of a concessionary contract aimed at helping the automakers restore profits.
Parts suppliers including Lear implemented a two-tier system years earlier to check labor costs.
About one-quarter of the nearly 130,000 UAW-represented hourly workers at the Detroit 3 receive the lower two-tier wage and benefit package today. They receive slightly more than half of the $28 an hour in wages paid to long-time UAW members.
Lear, which emerged from Chapter 11 bankruptcy in November 2009, posted 2013 adjusted earnings of $510 million, down slightly from $548 million a year earlier. Core operating earnings rose 10 percent to $839 million last year. Revenue increased 11 percent to $16.23 billion.