Can GM afford Equal Pay and Increased Pensions?

By Tony Leah

There are two important resolutions submitted to the Unifor Constitutional Convention being held in Toronto from August 8-12.

One calls for Unifor to fight for Equal Wages and Pensions (R-13), and the other calls for Improved Pensions Now (R-14).

Can the companies afford this?

The figures here are from General Motors, but figures for Ford, Stellantis (Chrysler), and other major corporations would be similar. They are all declaring massive profits, but none of them are offering improvements to workers or retirees.

$18.5 Billion Profit

GM’s profit in 2021 was an all-time record high $14.3 billion US dollars (earnings before interest and taxes – EBIT). That is the equivalent of $18.5 billion Canadian. It is the highest profit in the 114 years of the company’s history. Yep – in the midst of a serious pandemic, GM made more profits than in any year ever.

There is no mystery about the source of that astronomical profit – it comes from the hard work of assembly line, supplier, service and trades workers. Workers are the source of GM’s profits – but workers don’t reap most of the benefits.

GM’s profit from only their North American operations in 2021 was $13.3 billion – created from the work of about 50,000 workers in the US, about 15,000 in Mexico, and about 7,000 in Canada – a total of 72,000 workers. If you divide GM’s profits by the number of workers you will find the astonishing fact that GM banked $184,722 in profit for each and every worker in Canada, the US, and Mexico. If you were a GM worker in 2021, that is how much profit you produced for the company.

If workers are not seeing the fruits of our labour – who is? In 2021 Mary Barra, GM CEO, increased her take to over $37.5 million Canadian. Her income was up over 23% for one year. The top 5 GM execs took in over $89 million Canadian – up more than 33% from 2020.

How many GM workers or retirees got an increase of 23% or 33%?

Equal Pay for Equal Work

Equal pay for equal work is a fundamental union principle. Unfortunately, GM and the other auto companies have been able to get away with paying newly-hired workers far below the established wage rates for some time now.

If one worker is making $23.67 an hour while another worker makes $37.03 for doing the same job – GM is pocketing the difference of $13.36 every hour of every shift.

There are approximately 2,000 assembly workers at GM Oshawa who are at the lower entry level wage. How much would it cost to bring all of them up to the top rate immediately? The simple calculation is 2,000 (workers) times $13.36 per hour times 2,080 hours per year. That comes to $55,577,600 or only one third of one percent of GM’s 2021 profit.

Another way to look at it – the pay to only the top 5 GM execs is more than the annual amount it would take to bring all Oshawa assembly workers to the top rate immediately.

Increased Pensions

There are just over 30,000 retirees and surviving spouses in the GM pension plan for all of Canada (January 1, 2020 the number was 30,434).

What would it cost to substantially increase pensions for all Canadian retirees?

If pensions were increased by $200 per month, it would cost GM 30,434 times $200 times 12 = $73,041,600. That is only 0.4 percent of GM’s profit in 2021.

Once again, the pay of just the top 5 GM execs in 2021 was more than the amount needed to give every Canadian retiree or surviving spouse an immediate increase of $200 per month.

Yes, GM Can Afford Equal Pay and Increased Pensions

GM could immediately bring all Oshawa production workers up to the top rate, and give all retirees and surviving spouses an increase of $200 per month, and it would cost them substantially less than 1% of their 2021 profits.

About the author
Tony Leah is a retired GM Oshawa autoworker and chair of the Unifor Local 222 Political Action Committee. Tony’s work has been published at Rankandfile.ca before, including this January 2022 article about 2-tier wages and pensions.