Upcoming labor negotiations involving the UAW and General Motors, Ford Motor Co. and Fiat Chrysler will be packed with potential and peril. That much is familiar in the decades-old jousts between labor and management. But little else is.
This time around the Detroit 3 have different labor costs. That's largely because of 2007 emergency agreements that created two-tier union wage scales, letting the automakers hire new employees for lower pay than existing ones.
That huge UAW sacrifice was key to the survival of the Detroit 3 during the Great Recession. Without it, any government-led rescue would have been impossible.
The crisis has long since passed. Today the U.S. operations of the three companies are profitable and growing.
But the two-tier wage system remains. Some Tier 1 UAW workers make about $28 an hour while newer Tier 2 workers beside them are paid $15 to $19 an hour with little chance to catch up.
A two-tier wage scale for workers performing identical tasks, based not on length of experience but on an arbitrary date, is unfair -- and not just to lower-tier workers. It's corrosive to cooperation and trust companywide, a position that FCA CEO Sergio Marchionne seems to share.