GM Seeks to Cut Wages in Half at Indianapolis Factory

GM stamping plant workers in Indianapolis have told the company they won’t cut their wages in half, even when threatened with a shutdown. A prospective buyer of the 650-worker factory has indicated he wants United Auto Workers members to drop from $29 an hour to $14.65.

“If they were to succeed in cutting our wages here,” said shop chair Greg Clark, “they could easily just bring stamping work here, whipsaw us against the other facilities, and before you know it, the whole stamping division would be under siege.” Other GM stamping plants are in Parma, Ohio; Marion, Indiana; and Flint, Michigan.

Although UAW Local 23 members voted 384-22 in May against opening the contract, the UAW International is strongly backing the cuts, indicating that it may go around the local to talk to prospective buyer JD Norman Industries of Illinois. But Clark says, “If you need a wage cut before you even begin, this is not the business you need to be in. Maybe you should try something else.”

Many of the Indianapolis workers are “GM gypsies” who have been forced to transfer from plant to plant during their careers. Clark, for example, is on his fifth factory and third plant closing. The union contract gives workers the right to “follow their work,” so if the plant closes next year as threatened, workers could likely find GM jobs in other towns.

The mood is uncertain as workers wait to see what the UAW International will do. Machine repairman Kenneth Craig said some high-seniority workers want to see the plant bought if they could retire and then return to work at half pay. “They don’t care what it will do to the rest of the union,” Craig said.
Clark, who says he thinks members voted for him as shop chair 10 months ago because “they were tired of being pushed around,” said, “You do have some individuals who think it’s just about self. It’s bigger than that.”


Meanwhile, 2,200 GM parts workers in Saginaw, Michigan, revoted on steep concessions June 29 and this time said yes. As in Indianapolis, they also had been pressured by International and local UAW officials who said the wage cuts would help GM sell the plant.

Production workers in Saginaw, most with less than four years’ seniority, were already working at second-tier wages of $14.50 to $18.50 an hour. They were offered voluntary “buydowns”: a worker making $18.50 will get a lump sum of $30,000 if he agrees to work for $14.50, or $40,000 if he goes down to a starting wage of $12. Wages will be frozen for five years, except for small raises for the $12 workers in years four and five.



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Skilled trades workers were given no option: they must take an $8 an hour wage cut, from $37 to $29, in exchange for a $50,000 lump sum. Skilled new hires will come in at $24, apprentices at $20.

All workers will get a signing bonus of $5,000. Other concessions are to cut shift premiums in half: third shift drops to 5 percent and second to 2.5 percent. Time-and-a-half for overtime won’t be paid till after the 40th hour of work in a week, rather than eight hours in a day.


“People are inquiring daily, how soon can I buy down?” said Saladin Parm, a district committeeperson. He predicted that 85 to 90 percent of the workforce will buy down their wages: “They think ‘maybe in two to three years I’m not going to be here.’” It would take a worker who accepted a $6.50 wage cut for $40,000 about three years to start falling behind, if taxes and overtime aren’t taken into account.

“We have a younger group that will take the money and do other things with their lives,” Parm said. Another segment are in their late 50s. “The corporation is trying to get toward a transient workforce. It’s not like the old days where you worked 30 years.”

With planned high turnover and a continuous stream of new workers, GM or its successor can enjoy the $12 an hour wage indefinitely.

Immediately after the 3-1 vote against concessions June 17, GM laid off 50 skilled tradespeople and some production workers. The company then added family health insurance to its offer. Before, bought-down workers would have gotten insurance only for themselves. The second time, they voted yes 3 to 1.

A version of this article appeared in Labor Notes #377, August 2010. Don't miss an issue, subscribe today.


ericdwayne (not verified) | 08/17/10

WOW! Our Local 23 must have lots of power to be stopping a major corporate sale... Right?

Selling the Indy Metal Fabricating facility is not the responsibility of LOCAL 23! GM negotiated and signed a Contract and GM will honor it till the end just like any other debtor. We will not bend nor do we intend on making this convenient for them by any means. We are, and will continue to make a statement until they quit holding us at this plant and grant our wishes to transfer. There are temp employees here, and at 3 other plants within 150 miles from this one and we cannot transfer. They could in return offer those temps at other plants jobs at the Indy plant if desired. It's this simple! If they truly want this sale then quit holding us back and let us go work else where. Let those who wish to stay and work for J.D. Norman remain... the rest of us will get the hell out.

But no... what's the real story here? If the City of Indianapolis is so concerned about lost tax revenue etc. and feel they need to get involved. Cut state and government employee wages as well if money is the true issue. But that's really not the real issue is it boys? It's simply UNIONS in general and how profit despises them. Do you think that banks are going to care about how people won't be able to pay their current mortgages or car payments anymore if this sale were to go through under the conditions offered? HELL NO! JUST MORE STATISTICS PEOPLE!

Bottom Line: If 600+ people are stopping the sale of a major corporation then we feel that they must not want to sale this facility very bad and create jobs as stated because we can go elsewhere.

NOTE: We are very aware that people despise Unions and think we are a bunch of lazy moronic idiots and that's fine! But remember, We don't walk out of the meetings, We are not the ones who leave with our tail between our legs, We are not the one who don't show up at meeting but yet slam us in the newspaper MO!, We are not the ones who are hiding anything, We are not the ones lying to the press and exaggerating the truth here to put public opinion against us. We are in fact standing up to big business regarding our contract and fighting to stop wage cuts for ourselves and will lead by example unlike some of our so called regional and international brothers.

With that said, we hope that Union and Non Union employees will voice their opinions more for the better of American Citizens.

We have "Solidarity" in our house people! How about yours?