Growing use of temps irks UAW

The Detroit 3 want to add temporary workers to help align their average hourly cost per worker with foreign automakers amid predictions of a declining sales market.

They will face a stiff battle during negotiations with the UAW, which wants the companies to give temps the wages, benefits and increased security that permanent positions provide.

The number of temps, how they can be used and for how long, are expected to be a contentious part of this year's contract negotiations, which formally start this week.

"That's really going to be a fight," said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich.

Adding temps is one of the levers automakers have to help curb labor costs. Foreign-based automakers often employ 20 to 25 percent temporary workers, helping keep their average hourly labor costs well below those of the Detroit 3.

General Motors, for example, wants more flexibility with its work force and wants to add temps, Dziczek said.

Automakers use temporary workers to help during product launches, vacations and to cover absences and assist with other production increases. One Fiat Chrysler Automobiles assembly plant at times requires temps to fill more than 20 percent of positions, and some Detroit 3 plants at times use hundreds of temporary workers.

Temps cost less than traditional hourly workers. They earn less, and automakers don't have to pay for unemployment insurance, workers' compensation and other benefits.

In January, the UAW sued GM in federal court for alleged breach of contract over the use of temporary workers at GM's Fort Wayne truck plant in Roanoke, Ind. The lawsuit, which is ongoing, centers on a number of laid-off workers from GM's Lordstown, Ohio, plant who wanted to transfer to Fort Wayne.

UAW President Gary Jones in March told the UAW bargaining convention in Detroit that the union seeks a resolution to address the companies using temporary workers in cases where permanent employees should be hired.

"We can do more to limit the use of temporary workers, especially where they are used instead of permanent employees," the UAW said in its 2019 bargaining resolution. "Contract language can be used to spell out when, for what, and for how long temporary workers may be used."

The UAW also wants to ensure temps have the same pay as new hires, health care, union representation and "a clearly defined path to permanent employment," according to the resolution.

The union also wants to see them employed by automakers instead of staffing agencies and covered under the UAW's contracts.

The UAW contends temporary workers miss out on earnings such as profit-sharing checks that have ranged from $5,000 to $12,000 a year under its current contracts. Temporary workers become members of bargaining units after 90 days and then pay dues.

Ford Motor Co., which has the industry's largest U.S. hourly work force at 55,000, also is believed to have the fewest temporary workers. At the end of 2018, Ford had about 3,400 temps, representing 6 percent of its U.S. hourly work force. It has hired 3,700 other temporary workers as full-time employees under the 2015 contract.

The automakers' use of temps varies and runs higher in summer. GM has about 4,650 temps, representing 10 percent of the 46,000 people in its U.S. hourly work force, though its annual average runs closer to 7 percent. FCA has about 47,000 U.S. hourly employees, and is believed to have about the same number of temporary workers as GM or slightly more.

Art Schwartz, president of Labor and Economics Associates and a former director of labor relations at GM, said temporary workers have a long history with the Detroit 3 and the union has agreed at times to keep them on to increase union membership.

"Companies want temps for the most part for vacation replacement, startups and temporary volume spikes," Schwartz wrote in an email. "Flexibility is the key. However, it is harder to justify temps if you're laying people off."

During the last round of contract talks, FCA expanded its ability to use temporary workers from Friday through Monday to all week. Ford also has increased its use of temps. In 2015, FCA and GM used them for 5 to 10 percent of annual hours worked, vs. less than 1 percent for Ford, according to the Center for Automotive Research.

In 2015, temps at GM and Ford were paid a $2,000 bonus after ratifying the contract that year. They also received a health care plan.

Dziczek said establishing a cap on temporary workers might be reasonable and doable for the union under this round of bargaining.

She said, "They'll have to win something there if they're going to give more flexibility on temps."

Vince Bond Jr. and Michael Martinez contributed to this report.