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Diamond-Star and auto workers.

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. With the broad classifications. Diamond-Star managers can use team production approaches, in which each employee or "associate" performs more than one task.

Diamond-Star is the third Japanese-managed domestic autombile plant in which the Auto Workers holds employee representation rights. The other two are New United Motor Manufacturing Inc. in Fremont, CA (jointly owned by Toyota Motor Corp. and General Motors) and Mazda Motor Manufacturing USA in Flat Rock, MI (partly owned by Ford). So far, the union has not succeeded in organizing a wholly Japanese-owned plant in the United States.

Elsewhere in the automobile industry, General Motors reported encouraging results of a new employee involvement plan at a plant in Oklahoma City, OK, despite resistance from some employees represented by the Auto Workers and some supervisors. The Voluntary Input Program (VIP), covering 5,300 rank-and-file workers, was adopted in a supplement to the Auto Workers 1987 national accord for General Motors plants. In October 1989, 67 percent of the employees were participating in the program, compared with 46 percent at its inception in May 1989. One inducement is a "pay for knowledge" provision permitting employees to earn an extra 20 cents to 70 cents an hour for taking on added responsibilities, such as aiding management in improving the quality of automobiles.

An official of Local 1991 indicated that success of VIP is not assured because some workers give up on attaining consensus with managers in meetings on improving operations. This problem was heightened by the fact that the VIP plan began during a period when the plant was undergoing many production changes.

The plant's personnel director admitted that some supervisors resisted VIP, concerned that workers were assuming a supervisory role in production. But, he contended that this view is unwarranted because only the roles and responsibilities of supervisors have changed, not their importance or value in the plant.
COPYRIGHT 1989 U.S. Bureau of Labor Statistics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:developments in industrial relations
Author:Ruben, George
Publication:Monthly Labor Review
Date:Dec 1, 1989
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