Diamond-Star and Auto Workers

By Ruben, George | Monthly Labor Review, December 1989 | Go to article overview

Diamond-Star and Auto Workers


Ruben, George, Monthly Labor Review


Diamond-Star and Auto Workers

A no-layoff provision was the feature of the initial contract between Diamond-Star Motors Corp. and the Auto Workers, leading to speculation that the union would seek the same provision in 1990 bargaining with the Big Three auto producers--Chrysler Corp., General Motors Corp., and Ford Motor Co. The Diamond-Star plant, located in Normal, IL, is jointly owned by Chrysler and Mitsubishi Motors Corp. of Japan, and produces automobiles for both companies.

The new provision permits layoffs only when the "long-term viability of the company is at stake." An Auto Workers official stopped short of saying that the new provision would figure prominently in the 1990 talks, however, contract provisions resulting from recent settlements in the auto industry have clearly reflected the union's concern for protecting jobs. The current contracts at the Big Three permit layoffs when sales decline. During such layoffs, employees are covered by Supplemental Unemployment Benefit (SUB) plans which are designed to give eligible employees nearly 95 percent of their normal take-home pay for up to 2 years when combined with State unemployment benefits. However, this does not always occur because of the sometimes severe drain on the company SUB funds.

The 3-year Diamond-Star accord covers 2,400 employees. It provides for 80 percent protection of take-home pay for up to 1 year in the event of layoffs and for a range of contract provisions that will bring employee compensation to parity with Chrysler and other companies in 1992. Prior to the settlement, base pay for Diamond-Star employees reportedly averaged $12.75 an hour, compared with an expected $17.01 in 1991, according to the union. (The $17.01 expected rate includes a union estimate of future automatic cost-of-living adjustments under a new formula matching that at Chrysler and the other companies, but does not include the money workers could receive under a provision guaranteeing them the same wage increases and lump-sum payments that Chrysler workers might receive in 1990 and 1991.)

A major gain for the company is a provision reducing the number of job classifications to three, compared with the dozens still prevailing at the other auto companies despite some consolidations of duties as a result of settlements in recent years. …

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