SPRING HILL, Tenn. — When General Motorsstopped building cars here two years ago, as the auto industry hit rock bottom and tens of thousands of assembly-line jobs evaporated nationwide, Chad Poynor packed up and moved to Michigan to keep working at another plant.

Mr. Poynor said he made the nine-hour drive back to Tennessee to see his wife and three children 24 times in the first year alone. “I’d go back tomorrow if I could,” Mr. Poynor said Wednesday after finishing his overnight shift in Lansing, Mich.

He and hundreds of other autoworkers may get that chance.

In a glimmer of light in a mostly downbeat economy, G.M. and the United Automobile Workers union have agreed to give the plant here a second chance as part of a tentative new labor contract. It is highly unusual for an automaker to bring jobs back to a factory all but left for dead, and several G.M. plants, including Spring Hill, will be adding work that had been headed to Mexico.

“I actually have a smile on my face today,” Mike O’Rourke, the president of U.A.W. Local 1853 in Spring Hill, said after learning the details of the contract. “It was very much gloom and doom. I lost all my hair and gained 50 pounds.”

The resurrection of Spring Hill would be another milestone in the fortunes of the domestic auto industry and, in particular, G.M.’s comeback from its government bailout and bankruptcy in 2009. The promise in the new contract of 6,400 jobs over the next four years, including 1,700 here, is being seen as a vote of confidence that autoworkers in the United States, even unionized ones, can compete with lower-wage nations.

Some of the jobs here will go to current G.M. workers at full wages of $28 an hour, but many of the workers will be hired on G.M.’s second-tier pay scale, which would start around $15 an hour in the new contract.

“We’re bringing back a lot of work that left this country,” the U.A.W.’s president, Bob King, said of the contract, which is subject to ratification by G.M.’s 48,500 workers in the United States.

Perhaps nothing better symbolizes the ragged journey of Detroit’s Big Three in recent decades than the Spring Hill plant, which was built in the 1980s as the launching pad for G.M.’s highly promoted Saturn division.

In the 1990s, thousands of Saturn owners traveled here for “homecoming” parties to celebrate their bond with the vehicles and the workers who made them. The plant became known to TV viewers after G.M. hired the advertising agency famous for creating President Ronald Reagan’s upbeat “Morning in America” re-election ads. Commercials featured the plant and its workers with the slogan, “A different kind of company, a different kind of car.”

But the Saturn brand never lived up to its promise and is now a casualty of G.M.’s bankruptcy. The only work being done at the plant here, 30 miles south of Nashville, is a much smaller operation making engines. James L. Bailey, the mayor of Maury County, which includes Spring Hill, described the past two years as “a time of trauma.”

Unemployment in the county rose as high as 17 percent after the plant closed; the rate is now about 13 percent. In nearby Columbia, where many G.M. workers lived, downtown storefronts emptied and homes went into foreclosure. The Santa Fe Cattle Company, a steakhouse with a U.A.W. flag in its foyer, closed, and this year’s graduating high school class lost 85 students after the plant shut down.

“They bought a lot of things, they did a lot of things,” Mr. Bailey, who works out of a cramped, century-old courthouse in Columbia’s town square, said of G.M. workers. “When they went away, it affected a lot of businesses here.”

G.M. declined to publicly comment on the Spring Hill decision. The company has avoided discussing specific terms of the agreement until it is approved by members.

People with knowledge of the negotiations said that union leaders pressed hard in the final stages of the talks for Spring Hill to be reopened. Michael Robinet, an analyst with the research firm IHS Automotive, said the company saw an opportunity to make inroads with the U.A.W. while bringing back a facility at a relatively low cost.

“The Tier 2 workers definitely changed the economics of the plant,” he said. “It’s definitely a win for the union. I can’t recall the last time a plant of this size was brought back after it was closed.” [cont.]

                                                                      — Comments —

Karen I. writes:

What do you think of the pay scale of the second tier GM employees? It’s good that the jobs are supposed to come back, but the wages seem to be on the low side for the work involved. I think it might be a great start for younger men, but the wage listed for the tier two employees is not a wage that can support a family where I live. For a family with two adults and two children, it would be difficult to find a decent apartment and keep it heated in the winter on that wage. It would be impossible to buy a home. One of the reason many women say they work is because their husbands don’t make enough to support a family. If we are going to advocate that women stay home to raise children, don’t we also have to advocate for wages that can support families for men?

Laura writes:

These are much better than wages offered in retail and they probably include health benefits, pensions and vacations. They come to about $31,000 a year. I think it is possible for a family to survive on that.

The first steps in restoring a family wage is to give priority to men in hiring and to create a climate in which manufacturers can make a profit. American consumers are not going to buy expensive American-made cars just so they can support these workers’ families. We would have to restrict the market to foreign cars first. For the benefits and drawbacks of that, I recommend our recent free trade discussions.

R. A. Martin writes:

I work in management for a “tier two” supplier of automotive components. We are located in rural North Georgia, and I suspect that Spring Hill, TN would probably be a similar area. The top wage for a skilled line worker in this area is around $15/hr. Maintenance technicians bring in closer to the $20-$25/hr range. I do not think that this would not be competitive wages for the area. 

But as is the case with a lot of lower to lower-middle class families these days, most of our line employees are from families in which both the husband and wife work. To increase wages, a decrease in supply of workers would be a start. And the most logical place to start from a regulation perspective is to slow down or halt legal immigration altogether. Then, we must deport illegals and make illegal immigration a lot less appealing to our friends south of the Rio Grande. 

Reversing the trend toward two-wage earner families, I am afraid, is going to take social change.

Jesse Powell writes:

I think it should be remembered that workers are paid according to their marginal productivity first and foremost. It appears that the union in Spring Hill offered wage concessions in order to make it economically profitable to reopen a plant that had previously been closed. 

This story brings up a lot of issues such as unions, foreign competition from low-wage countries, and the “family wage” for men. If a union demands higher wages than the market can bear then of course they will bankrupt their company and put themselves out of a job. If an employer doesn’t offer their workers sufficient wages then presumably their workers will quit and find a job that pays more money. The key determinant of wages however is the productivity of the worker himself, not foreign competition or newly arrived immigrants. The existence of poor countries does not reduce the productivity of rich countries and therefore does not suppress the wages paid in rich countries. Likewise recent immigrants do not reduce the productivity of those already in the country and so do not suppress the native born’s wages. 

As far as “restoring the family wage” I think the whole concept of a “family wage” job is misleading. Any wage that men earn is a “family wage” because the role of the man is to provide for his family regardless of how rich a country he lives in. Society should be organized around the man playing his proper role and the woman playing her proper role, the income level of a country has nothing to do with it. 

When men earned less money in absolute terms in the past married women worked less than they do today. Of course there is the question of how we get from where we are today to where we want to be tomorrow but in terms of wages for men that is something that is determined by the market. The point is not to raise men’s wages in order to allow them to be breadwinners; the point is to organize family life so that whatever men earn is sufficient for them to fulfill their role as men.

Laura writes:

I agree that the “family wage” is problematic for the reasons you mention. But recent immigrants do affect the wages of the native born. I don’t understand how you can assert that they do not.

MarkMark writes:

The wage of $15/hour  in Tennessee goes farther than $25/hour in New York or New Jersey. It depends on where one lives as to whether or not a given wage is good or not. 

Mr. Powell replies to Laura:

The standard theory of wages is that workers are paid according to their marginal productivity, their “marginal productivity” being how much output their individual contribution adds to the firm. The reason why I say recent immigrants don’t affect the wages of the native born is because the presence of a new potential worker doesn’t change the material environment the native born worker exists within. The production of an economy is determined by capital, labor, and “total factor productivity”; total factor productivity being the magical ingredient of new technology or new ways of doing things that is the foundation of true economic growth and progress. 

Now, if I owned a company that employed only native born Americans and I paid them $10 an hour and suddenly a flood of Mexican immigrants came across the border and offered to do the same work for me for $8 an hour then logically I would fire all my American workers and replace them with the cheaper Mexicans that are now available to me. Since my labor costs just went down and the market for my products is the same this sudden reduction in my costs of doing business would make me lots of money. 

So, what happens to all the American workers I just fired? They need to get new jobs. This sudden increase in unemployment will indeed decrease the wages the native workers can earn due to increased competition for limited jobs but over the longer term new businesses will be created that can put the displaced native born workers to work in a way that best utilizes their skills. 

It should be remembered the initial business that got the big benefit from hiring all the recent Mexican immigrants was an American business presumably headed by someone who is native born. The native born are the ones who directly benefit from the cheap labor of the Mexican immigrants when the Mexican immigrants first arrive. 

There is a transition cost when the new labor source arrives, the economy does require time to adjust to a new reality, but over the longer term the native born worker should find employment that best utilizes their skills. 

The factors of supply and demand alter things over the short term but it is the productivity of the worker himself that is the primary determinant of the worker’s wages over the long term.

Laura writes:

This sudden increase in unemployment will indeed decrease the wages the native workers can earn due to increased competition for limited jobs but over the longer term new businesses will be created that can put the displaced native born workers to work in a way that best utilizes their skills. 

But, there is no physical law that guarantees jobs will be created to hire those who have been displaced. This is hypothetical. Low-skilled workers have a limited range of possibilities and the entrepreneur may use his money to create a largely automated business. 

Mr. Powell writes:

There is no “physical law” that mandates the displaced workers will be hired by a newly created company but the pool of unemployed workers provides an opportunity and incentive for an entrepreneur to create a business that can employ them. 

During the time unemployment is elevated the unemployed worker can be hired for a wage significantly under his marginal productivity; this makes him highly profitable for a new business to employ. The reduction in worker’s wages directly translates into greater profits among the businesses the displaced workers seek new jobs with. During the period of increased unemployment it is worse to be a worker but better to be an entrepreneur. This leads more people to seek to become entrepreneurs since the entrepreneur can profit from the large pool of unemployed people who are willing to work for a wage significantly below their marginal productivity; the difference between the worker’s marginal productivity and his wage being the employer’s profit. 

So, there is an incentive to create new jobs to employ the displaced workers. In effect, the employer class benefits from the disruption of a sudden increase in available workers since the transitional decrease in the employee’s pay directly corresponds to a transitional increase in the employer’s profit. However, it needs to be kept in mind that the new source of cheap labor is an economic benefit to the economy overall as the same production is being done at a lower cost. 

This is how things work according to economic theory; what happens in real life however does not always follow this ideal. There are many non-market factors or interventions in the free market that can prevent an economy from getting back to a happy equilibrium after an external shock such as a sudden increase in immigration has occurred. The skills a worker possessed that may have fit quite well with an industry that once was booming but now is in decline may not transfer well to the new types of jobs that can be created in the new economy; in this way a worker may suffer from a change in the economic landscape for an extended period of time.