Visteon Corp. and United Auto Workers Sign Seven-Year Supplemental Labor Agreement

DETROIT May 6, 2004; John Porretto writing for the AP reported that Visteon Corp. and the United Auto Workers signed a seven-year supplemental labor agreement Thursday that allows the world's second-largest automotive supplier to pay new hires represented by the UAW far less than current workers.

The two sides announced a tentative deal April 29. The two-tiered wage arrangement also requires newly hired employees to pay higher out-of-pocket health care costs, part of an overall compensation plan Visteon says will make it more competitive.

"We're pleased to have worked cooperatively with the UAW to reach an agreement that improves our cost structure while providing opportunities for future UAW-represented employees," said Robert H. Marcin, Visteon's senior vice president for corporate relations. "This is an important step in our continuous drive to be a globally competitive Tier 1 automotive supplier."

The agreement covers employees at Visteon's 15 UAW-affiliated facilities in the United States. Under the terms, the new starting wage will be $14 an hour. The hourly wage can grow to $18.50 by the end of the deal.

The UAW has reached a similar arrangement with Delphi Corp., the world's largest automotive supplier. In exchange, Visteon and Delphi have pledged to send more work to their UAW-represented plants and not to close any of their U.S. plants until 2011.

Visteon and Delphi are the largest parts suppliers to Ford Motor Co. and General Motors Corp., respectively.

Current UAW workers at Delphi and Visteon are paid $24 an hour on average, though some earn $36 an hour. Their wages and benefits are identical to those of union members at Ford, GM and DaimlerChrysler AG's Chrysler Group.

The UAW traditionally has demanded equal pay for equal work. But faced with declining membership, it relented on the two-tiered wage and benefit agreements with the parts makers.

Visteon has 72,000 employees in 25 countries, including 21,000 U.S. employees covered by the supplemental agreement with the UAW.