GM's Hourly Workers Losing Edge Over Salaried Ones

By KRIS MAHER

WEST MIFFLIN, Pa. -- As domestic auto makers consolidate operations with or without a government bailout, the closing of an aging General Motors Corp. metal-stamping plant here shows how blue- and white-collar workers have been treated differently, with the former faring slightly better.

Earlier this year, United Auto Workers union members at the suburban Pittsburgh plant had the option of taking early retirement, a buyout or transferring to another plant. Those who didn't take one of the choices now face a layoff.

Under the union contract, laid-off hourly workers receive pay from GM to supplement unemployment insurance that brings their income to 72% of their gross pay. After 48 months, workers can enter a "jobs bank" and receive 85% of their gross pay, until another GM job opens up.

Salaried workers at the plant, meanwhile, had the option to transfer or take early retirement, but weren't offered a buyout if they weren't yet eligible to retire. A handful of salaried workers will lose their jobs when the plant closes this Friday and receive a severance package.

"There's a lot of guarantees that the auto workers have because they're under contract, as opposed to what happens to white-collar workers," said John Russo, co-director of the Center for Working-Class Studies at Youngstown State University in Ohio.

That calculus appears to be shifting as the UAW is under pressure to make concessions. On Wednesday, UAW President Ron Gettelfinger said the union would give up one of the biggest protections for hourly workers, the controversial jobs bank that enabled workers to continue to receive most of their pay after plant shutdowns.

Many of the remaining hourly workers here hoped the jobs bank would provide some financial security while waiting for an opening at another GM facility. But that option also appears to be fading given production cutbacks proposed by the company this week.

Lisa Sericola, a production worker who earns about $50,000 a year after 14 years with GM, was counting on the jobs bank when the plant closes. She doesn't know whether GM will make new offers of a transfer or buyout to hourly workers. "Our future is really uncertain," she said.

Tony Sapienza, a GM spokesman, said it was too early to comment on how union employees could be affected by proposed UAW concessions.

Despite the different treatment, there appears to be little resentment between hourly and salaried employees here. Workers described the plant as a close community of longtime employees in which many friendships had developed among workers from both camps.

Both groups said GM has been a generous employer, so much so that many don't want to disclose their compensation for fear it could feed a perception that GM employees are overpaid. They note that GM has tried to cut staff through buyouts, transfers and early retirements, rather than layoffs. This metal-stamping plant, which two years ago had 500 workers, including 80 salaried employees, is down to 100 workers, including 20 salaried employees, according to Rick Mismas, a local UAW official.

The plant opened 58 years ago in a now-faded industrial valley once dominated by steel plants. Most recently, workers made fenders, doors and hoods for the compact Chevy Cobalt. The plant originally was slated to close at the end of 2007, but won a reprieve when a former GM executive and other investors surfaced saying they wanted to buy it. A deal to sell the plant and keep it open fell through earlier this year as credit markets tightened.

Ruth Dischner, 57 years old, was recently forced to retire as communications manager. She is receiving 65% of what her pension would have been had she retired at age 62. In addition, she received severance of six months of salary that went into a 401(k) plan, whose value is down 40% this year.

Ms. Dischner, who worked 32 years at GM, said she thought it was time for the jobs bank to go, but she didn't blame the union for the company's troubles. She also noted that she had become friends with many hourly workers at the plant. "We watched each others' kids grow up," she said.

Even though hourly workers receive supplemental pay and transfer rights when the plant closes, she doesn't hold it against them, and says all the workers are affected. "The plant became our community and our little village," she said.

Rick Vargesko, who had been president of the plant's UAW local, took advantage of the union's job-transfer rights earlier this year and now drives a forklift at GM's plant in Lordstown, Ohio. Although he commutes on weekends back to Pittsburgh, he considers himself lucky to have the transfer rights, which allow all UAW members to apply for a job at another GM plant based on their seniority. When he lost his job at U.S. Steel 27 years ago, he was out of work for four years.

Yet, in the current environment, even transfers don't look as promising. The Lordstown plant is scheduled to lay off about 1,100 workers in January. "I really don't know what is going to happen," said Mr. Vargesko.

Write to Kris Maher at [email protected]

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