1999: The UAW concludes the richest contracts in the union’s history with GM, Ford and Chrysler. The Big Three had just completed a period of record-breaking earnings from a seven-year boom in light truck sales, noted Sean McAlinden, vice president of the not-for-profit Center for Automotive Research in Ann Arbor, Mich.
2003: Faced with increasingly difficult economic conditions, the union accepts a settlement with smaller gains in wages and benefits. For the first time, it opens the door to a two-tier wage structure in the auto industry, though it wasn’t implemented at the time. (It had already accepted a two-tier wage structure at Caterpillar.) The average hourly cost of first-tier UAW production labor would rise from $55.40 per hour for wages and benefits in 2003 to $64.99 per hour in 2007, an increase of 17.3 percent, McAlinden estimated at the time. The controversial jobs bank, created in the 1980s to pay workers whose jobs were eliminated by new technology or outsourcing, remains intact. The union also agrees to let automakers use money from pension funds to finance employee buyouts and shrink payrolls.
2005: The union reopens contracts with GM and Ford to create voluntary employee benefit associations, or VEBAs, to assume responsibility for retiree health care, which has become increasingly costly for the automakers. The VEBAs take over responsibility for health care Jan. 1, 2010, after the companies make multibillion-dollar contributions to the funds.
2007: The union negotiates a new contract that includes $3,000 signing bonuses and annual lump sum payments in lieu of wage increases. The contracts require larger copays and deductibles on health care. The union also makes major concessions on work rules and agrees to place new workers on a second tier.
2009: With GM and Chrysler facing bankruptcy, the UAW reopens contracts to make concessions, including giving up the cost-of-living allowance and eliminating the jobs bank. A key change involves extending the use of the second-tier wage of $14.65 through 2015. In addition, the changes specify that as older workers retire, 25 percent of the total workforce will be left on the first step. If the percentage of new workers goes above 25 percent of the total workforce, new workers with more seniority will moved toward the first-tier wage — but it takes them three years to grow into it.
