Source have told Crain’s Detroit Business that the new deal with the UAW gives second-tier workers a pay raise to $29/hour, up from the $25/hour proposed in the rejected agreement from a few weeks ago. The contract also wouldn’t cap the number of Tier 2 workers hired by the automaker. Fiat Chrysler Chief Executive Officer Sergio Marchionne needs a deal that holds down labor costs and maintains flexibility for the least profitable of Detroit’s three carmakers. Williams added the union has made real gains and is planning a discussion about the terms with its members.
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Williams will meet with UAW National Chrysler Council Friday at 11 a.m.to go over the proposal which becomes a tentative agreement once they vote approval. Shawn Morgan, a spokeswoman for FCA, and Brian Rothenberg, senior communications adviser for the UAW, declined to comment on any details.
This is the second tentative agreement reached between the groups.
The UAW reported one week ago that 65 percent of its members voted against a proposed agreement that would have approved raises for all workers and decreased the pay gap for second-tier employees. That would have been the first stoppage at a USA automaker since 2007. Investors are concerned that the new agreement may cost Fiat Chrysler more than the previously rejected agreement last month.
Workers outside the gates of a Fiat Chrysler plant in Kokomo, Indiana, greeted news early on Thursday of a new tentative agreement between the automaker and the United Auto Workers skeptically, giving an indication of the challenges the union may face in getting the deal ratified by members.
About 45% of Fiat Chrysler’s workers are considered entry-level, much higher than the mix at Detroit rivals Ford Motor Co. and General Motors Co.
A work stoppage would have crimped the flow of cash to the unit, which generated about $1.6 billion in net sales a week previous year. Walkouts by the UAW have been rare for the past decade, with the last two in 2007 when workers struck GM for two days and Chrysler for six hours.
UAW, which represents around 40,000 FCA factory workers at 23 USA plants, said in a post on its website that its bargaining committee had “secured significant gains”.
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The top wage for the newer workers is roughly $10 an hour more than the $19.28 ceiling the entry-level workers now make under the 2011-15 deal.
