America’s three major carmakers may soon get the break they’ve been waiting for with news that employees paid just $14-an-hour will be joining the ranks in less than a year. All three brands - Chrysler, Ford and GM - are expected to hire about 36,000 hourly and salaried staff in Michigan over the next four years to replace people who have agreed to take voluntary buyouts or are retiring.
Unions and the carmakers agreed to the deal after a number of strikes last year, which affected more than 74,000 workers. Because of the buyouts, GM ended up posting a record $38.7-billion loss for 2007 and Ford and Chrysler would have suffered substantial losses as well.
The $14-an-hour rate is about half of what is currently paid and it works out to be even less when you consider the fact that it doesn’t include retiree health care benefits or a defined pension. The low rate only covers ‘non-assembly’ jobs and officials are yet to announce which jobs will be considered non-assembly and which ones won’t.
Since 1999, Michigan auto industry jobs fell from highs of 316,300 to around 129,000 at the end of last year. With the new rules in place, carmakers are set to hire about 19,000 workers as early as next year and another 5,000 in 2010. By 2016, this figure is expected to jump to 77,000.