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Tiny Chevrolet Sonic Helps Detroit Shake Off Rust

At the end of June, GM made up its mind: The Orion factory would get the small car. But there was a catch. The plant had to shut down for more than a year to be revamped â¿¿ a closure that would further threaten businesses in a fragile economy.

Dunn watched as workers removed the plant's equipment, knowing GM could pull out of the deal at any time.

"You could see from one end to the other," he said. "There was nothing in there but cement and pillars."

___

NEGOTIATING A FUTURE

There was another obstacle. GM and the UAW had to figure out how to cut labor costs at the plant.

For decades, the UAW and automakers fought openly as the companies tried to reduce costs and the union demanded pay increases. The UAW would strike, or threaten to, and the companies would cave in. By 2007, GM was paying $1,400 more per vehicle for labor than nonunion Toyota.

That same year, both sides agreed to a historic compromise on labor costs. They established a two-tier wage system that would pay new employees around $14 an hour, or half the hourly wage of older workers. Worker pay and pensions were frozen. Union trusts funded by the company and workers would take over retiree health care costs. Union President Bob King said each worker gave up at least $7,000 during the four-year contract.

But GM still couldn't make money building the Sonic at Orion without an immediate influx of lower-wage workers. So the UAW and GM went beyond the national agreement and came up with an unprecedented solution. More lower-wage workers could be hired at Orion than any other plant in the country. Forty percent would be paid the lower wage, as opposed to a maximum of 25 percent at other factories.

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