Lower wages now at Big Three automakers, but new hires aren't whining

Working at General Motors is all in the family for Jennifer Sanders. A sixth-generation GM worker, the 20-something single mother couldn't be happier about it, even though she is among the new crop of auto workers who earn about half of what entry-level factory em-ployees used to make.

"We joke that, when we sit around the dinner table, most families talk about other things, but we talk about the car industry," says Ms. Sanders, who lives just outside Flint, Mich. "It's in our blood."

Generations of families in the Detroit area have owned homes, raised children, and enjoyed their retirements as a result of the wages and benefits afforded them during decades of work in the US automotive industry. Yes, jobs had waned over the years, but not until the Great Recession hit in 2008, when the bottom fell out of the car market and GM and Chrysler teetered on the brink of collapse, did folks here worry that all those livelihoods could be gone for good.

In the end, the federal government intervened, those companies restructured, the auto workers union made big concessions, and a venerable US industry was saved. But most workers accept that the good old days are gone for good – and that landing a job at a Ford, GM, or Chrysler plant today is a precious thing.

"The whole game has changed for automobile workers. I do not see a great deal of growth in UAW [United Auto Workers] membership because I do not see a great deal of additional jobs at the Big Three," says Mike Smith, a labor historian at Wayne State University in Detroit.

UAW membership grew about 1 percent last year to almost 381,000. For the first time in its history, the labor union conceded that the three US automakers could establish a second-tier workforce paid at half the hourly wage rate, with reduced benefits, of incumbent workers. At GM and Chrysler, second-tier workers can't move to full-wage status until at least 2015; at Ford, the company can fill 20 percent of its workforce with lower-paid workers.

Sanders's father, Richard Roy, a 35-year UAW worker at GM Flint Tool & Die, worries about what that means for his daughter.

"It's sad, because I've been able to look at my career and can decide when I'd like to retire and know I have something to fall back on because I have good negotiated benefits," but his daughter won't have the same option, he says in a phone interview.

Still, GM, Ford, and Chrysler remain in the top four when it comes to pay scales, according to the Center for Automotive Research, an industry think tank in Ann Arbor, Mich. A typical employee cost Ford $58 an hour in 2011; GM, $56 an hour; Toyota, $55; and Chrysler, $52.

Of course, the Detroit Three aren't the only game in town. Foreign competitors are investing heavily in US plants, although their workers are not unionized and generally earn less. Thirty-nine percent of North American auto workers now work for a company other than one of the Detroit Three, up from 15 percent in 2000, according to findings released last month in Automotive News. Since 2005, 12 new assembly plants have opened in North America, but only four were opened by US automakers – and two of those were in Mexico.

Sanders, for one, is undaunted by any of that. Her earnings at GM's Orion Assembly plant in Lake Orion, Mich., where she installs parts to the back cushions of the Chevy Sonic, dwarf the $75 a day she made as a substitute teacher while waiting to land a full-time job at GM.

She waited two years, and when the call came in January, she was "elated." It immediately put her closer to her dream – moving into her own house and setting up a more permanent life for herself and her daughter.

"It's a good opportunity even though it's a different industry than it was," she says. "No job has 100 percent stability. Things are looking up."