Unions forced into two-tier wage systems

"This is absolutely a surrender for labor," Mike Masik Sr., a union leader for Harley-Davidson told the New York Times.

At General Motors Co., Chrysler LLC, auto parts maker Delphi and Caterpillar Inc. unions have agreed to two-tiered wage systems that could be permanent. Unlike the recession of the 1980s, recent concessions on wages at those companies have no end point, the Times reported Saturday.

With new workers paid less than established workers at these plants, it is clear that "Management clearly has the upper hand in negotiations because of the employment situation," said Milwaukee Mayor Tom Barrett.

At Harley-Davidson, the company threatened to close plants in Wisconsin and move to a state where labor costs were cheaper.

Mercury Marine used the same strategy, threatening to move production from Wisconsin to Stillwater, Okla. or Kansas City, Mo., if the union did not agree to a contract that pushes back wages for established workers if they are laid off and then called back to work.

Furloughed workers returning to work must accept the lower wage, $5 to $15 less than what they earned before the furlough.

The union accepted the deal.

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