UAW Workers Vote 457 to 96 to Close Plant Instead of Reducing Salaries

With Indiana unemployment rate at 10.1% one might think that jobs that pay more than double the minimum wage would be in demand. Actually, such jobs are in demand, but ironically not from some of those who have them.

Let's take a look at an offer Illinois businessman Justin Norman made last August to UAW members in a plant in Indianapolis scheduled to close in 2011. The offer was rejected today.

Illinois Businessman Proposes to Save 650 UAW Jobs

August 29, 2010: Norman talks pay with GM workers

Illinois businessman Justin Norman continued his effort to win over GM Indianapolis stamping plant workers, telling a gathering Sunday that skilled trades employees at his Chicago-area plant will earn nearly $100,000 this year.

GM executives three years ago scheduled the shutdown of the 2.1-million-square-foot metal plant in 2011 if no buyer appeared. This spring, JD Norman Industries agreed to take over the factory if UAW Local 23 accepted a new contract that cuts costs.

The new contract would include a lower base wage of $15.50 per hour, down from $29 per hour, and pare the wage for skilled trades workers to $24 per hour from about $33.

Autoworkers who stay with JD Norman would receive lump sum bonuses, in some cases up to $35,000 over two years, and retain the right to transfer to open GM plants. They could keep the bonus if they did transfer.

UAW Prefers No Jobs to Jobs

September 27, 2010: UAW turns down contract offer to keep Indy stamping plant open

General Motors autoworkers have rejected the contract offer from JD Norman Industries to continue operating an Indianapolis stamping plant, said Maurice Davison, a UAW official in Indianapolis.

According to retired GM autoworker Gregg Shotwell, publisher of the UAW dissident newsletter Live Bait & Ammo, the final tally included 457 "no" and 96 "yes" votes.

The rejection means that General Motors will proceed with plans to remove machinery and close the plant in 2011, Davison said.

The plant employs 650 workers.

How is it that people can be so destructive to their own well being?

Lines would be 5 miles long for jobs that pay $15-$24 per hour with a $35,000 bonus after two years if such an offer could be made to the general public.

I do not know the nature of their existing contract or how long severance benefits might last, but I strongly suspect many of those rejecting the offer will start looking for minimum-wage jobs at Walmart when their benefits expire. Few if any of them will blame themselves for their situation.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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