Academic journal article Monthly Labor Review

Wage Parity at Diamond-Star

Academic journal article Monthly Labor Review

Wage Parity at Diamond-Star

Article excerpt

Diamond-Star Motors Corp. in Normal, m, and UAW Local 2488 reached agreement on a 3-year labor contract covering 2,500 production and maintenance workers that preserves job security arrangements and wage parity with the Big Three U.S. domestic automakers. DiamondStar, formed in 1985 as a joint venture between Chrysler Corp. and Mitsubishi Motors Corp., became a wholly-owned Japanese transplant in 1991 when Mitsubishi bought out Chrysler's share.

Contract terms called for a lumpsum payment, known as a "quality and performance bonus," in June 1993 equal to 3 percent of an employee's qualified earnings paid during the last 12 months, and general wage increases agreed to by Chrysler during 1993 negotiations; continuation of the COLA clause for quarterly allowances equal to 1 cent an hour for each 0.26-point change in the Consumer Price Index for Wage Earners and Clerical Workers; and the fold-in to base wages of $1.82 in COLA payments earned under the previous agreement. The average hourly wage rate was $16.53 at the expiration of the previous contract.

Several changes were made in the benefits area, including the formula used to calculate pensions and establishment of a $31.45 minimum monthly pension rate per year of credited service; an increase, from 15 percent to 18 percent of earnings, in the maximum employee investment in the 401 (k) savings plan, and an increase in the company's match, from 50 cents on the dollar to 60 cents, on the employee's first 3 percent of earnings; improvements in group insurance, including increases in life insurance coverage (from $50,000 to $60,000), maximum weekly sickness and accident benefits (from $500 to $600), and maximum monthly long-term disability benefits (from $3,000 to $3,500); an additional 8 hours paid time off, from 104 to 160, depending on an employee's years of service; enhancements in leave of absence for short-term military duty and bereavement; and an increase in the number of holidays, from 42 to 44 over the term of the contract. …

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