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Temporary Workers at the Centre of Negotiations Between General Motors (NYSE:GM) and UAW

The United Auto Workers’ strike against General Motors (NYSE:GM) has entered its 10th day with several issues under consideration. But the parties are arguing most about on point, which is the use of temporary employees.

Differences in compensation for Temporary workers

The temporary workers are at the center of negotiation between the company and the striking UAW regarding a new 4-year contract. The temporary workers are UAW members who perform the same roles as the permanent workers, but they receive half the pay and much fewer benefits.

The union is seeking to have those workers get a clear path towards being permanent. The union also wants the temporary workers to receive compensation and benefits that closely match what the permanent employee receives.

During the last contract talks in 2015, the union approved occasional use of temporary workers by US carmakers. However, the two sides had agreed phase out the current two-tier wage structure with time. Currently, around 20% of the employees at Japanese carmakers in the US are temporary workers who receive a payment of around $50 an hour.

Automakers want strict rules in Temps

Temporary workers comprise around 7% to 10% of the total workforce of GM, and at the end of last year, the company had 4,100 Temps. On average GM pays its workers $63 per hour while Temporary workers usually earn less than $20, and they have fewer benefits. The company states that it could cut labor costs and maintain union jobs if it employs more Temps. The use if Temps allows the company to make up for the high absenteeism rates among the union workers. The automakers want the union to accept strict rules to push workers to attend their shifts.

General Motors has backed off on a proposal requiring workers to pay more on their healthcare. The company was initially proposing a share of around 15% instead of the autoworkers’ present 3%. It, however, wants the UAW to compromise on the issue of temporary employees. The two parties have been grappling with the issue of how much UAW members need to pay for the escalating healthcare costs.

Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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