Unions Yield on Wage Scales to Preserve JobsBy LOUIS UCHITELLE
MILWAUKEE — Organized labor appears to be losing an important battle in the Great Recession.
Matthew Levatich, president of Harley-Davidson, left, and Bill Peek, owner of Heart of Dixie Harley-Davidson in Pelham, Ala.
Even at manufacturing companies that are profitable, union workers are reluctantly agreeing to tiered contracts that create two levels of pay.
In years past, two-tiered systems were used to drive down costs in hard times, but mainly at companies already in trouble. And those arrangements, at the insistence of the unions, were designed, in most cases, to expire in a few years.
Now, the managers of some marquee companies are aiming to make this concession permanent. If they are successful, their contracts could become blueprints for other companies in other cities, extending a wage system that would be a startling retreat for labor.
Though union officials said they could not readily supply data on the practice, managers have been trying to achieve this for 30 years, with limited results. The recent auto crisis brought a two-tier system to General Motors and Chrysler. Delphi, the big parts maker, also has one now. Caterpillar, back in 2006, signed such a contract with the United Automobile Workers.
The arrangement was a fairly common means of shrinking labor costs in the recession of the early 1980s. At the end of the contracts, however, wages generally snapped back up to a single tier. At G.M., Chrysler, Delphi and Caterpillar, the wages will not be snapping back.
Nor will that happen for workers at three big manufacturers here in southeastern Wisconsin — where 15 percent of the work force is in manufacturing, a bigger proportion than any other state. These employers — Harley-Davidson, Mercury Marine and Kohler — have all but succeeded in the last year or so in erecting two-tier systems that could last well into a recovery.
“This is absolutely a surrender for labor,” said Mike Masik Sr., the union leader at Harley-Davidson, the motorcycle maker, not even trying to paper over the defeat. His union recently accepted a new contract that freezes wages for existing workers for most of its seven years, lowers pay for new hires, dilutes benefits and brings temporary workers to the assembly line at even lower pay and no benefits whenever there is a rise in demand for Harley’s roaring bikes.
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http://www.nytimes.com/2010/11/20/business/20wages.html?_r=1&sq=corporations two tier wages&st=cse&adxnnl=1&scp=2&adxnnlx=1290790917-dqeBQgxyOOEe8FXYT0k/wA