Ford Motor Co. is adding a second shift at its Chicago assembly plant, creating 1,200 jobs and enabling the company for the first time to hire some new union workers at significantly reduced wages, reported The Wall Street Journal.

The contracts that Ford, General Motors Co. and Chrysler Group LLC signed in 2007 allow the auto makers to fill jobs vacated by older workers who leave or retire with new hires earning a little more than $14 an hour on average—about half what current workers received when they started. Newer workers also get reduced benefits.

The new "second tier" wage was a big concession for the United Auto Workers union, whose workers have enjoyed some of the highest manufacturing wages in the world. It agreed to accept reduced pay for newly hired workers in an effort to help make the Detroit Three more competitive with foreign car makers that use nonunion labor in their U.S. plants.

GM and Chrysler hired some workers at the reduced wage but laid off all or most of them when the companies slashed jobs as the recession and downturn in auto sales deepened. Ford never hired lower-wage union workers.

But with sales now showing signs of recovery, both the Big Three and foreign car makers are increasing production and adding factory jobs.

Hiring a second shift of workers at Ford's Chicago plant should trigger the hiring of entry-level workers, said Jim Tetreault, Ford's vice president for North America manufacturing, though he declined to estimate how many.