At the GM plant in Orion Township, Michigan, about 100 workers sort parts to be used on the assembly line to build the Chevrolet Sonic. What is notable is that these workers are not GM employees but rather (UAW-represented) employees of an outside supplier. Their average hourly labor cost is about $20/hour, not only lower than that of Tier I GM workers but also lower than Tier 2 GM workers. As a result of using a significant number of lower-cost Tier 2 workers and (even-lower-cost) outside supplier workers, GM is expected to be able to reduce the labor cost per vehicle significantly, with expected savings of as much as $72 million per year.

A two-tier wage structure allows a company to pay new hires at a lower wage. At the Big Three (GM, Ford, Fiat Chrysler), the average hourly wage for Tier 1 workers is almost $28 versus a range of $17 to $28 for Tier 2 workers, depending on when they were hired, with it taking 8 years to reach the top $28 rate.

To what extent is the renewed job growth in the automobile industry in the United States due to the use of two-tier wage