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Disputed Hourly Pay Rule and General Motors 1998 strike

In an effort to save its shrinking rank and file, the UAW began a two-month-long strike against General Motors. At issue was GM's desire to eliminate its "pegged rate" pay system and cut its North American work force by about 40,000 jobs over four years. GM's pegged rate pay system allows plant workers who meet a daily quota in five or six hours to either go home for the day or collect overtime pay for the remaining portion of the day - a system that GM says creates great inefficiencies in production. GM believes that eliminating its pegged rate pay system and some workers will make its operations more efficient and raise workers' productivity. However, the UAW is fighting tooth and nail on both issues to keep its declining membership from further shrinking.

To support their position, GM officials cited lagging efficiency measures and high wages relative to other automakers. Workers at Ford produced an average of 33.2 vehicles per year and were paid wages that averaged $43 per hour. In contrast, GM workers produced an average of 27.9 vehicles per year and received $45 per hour.

Do these figures justify GM's proposed actions? References required.

Solution Preview

http://www.nytimes.com/1998/07/07/business/disputed-hourly-pay-rule-at-heart-of-gm-strike.html?src=pm&pagewanted=2

This is the correct approach by GM because of the fact that "pegged ...

Solution Summary

The solution discusses General Motors actions and their justifiability in the 1998 strike.

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