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. The proposed contract, according to the report, would not eliminate the tiered system, but instead bring closer the two pay scales. “We’ve reached a proposed Tentative Agreement that I believe addresses our members’ principal concerns about their jobs and their futures”.
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Union leaders from across the country are scheduled to gather in Warren on Friday to discuss and vote on the proposed deal before taking it to rank-and-file members to vote on the deal. A spokeswoman declined further comment.
The separation between the two classifications of union employees – veteran Tier 1 and more recently hired Tier 2 – was a major point of contention for the workers, who voted down the proposed contract last week by a margin of almost 2-to-1.
Up until as early as last night, the United Auto Workers Union (UAW) prepared to begin a strike as an agreement with Fiat Chrysler Automobiles (FCA) had yet to be reached.
The second-tier workers were hired during the 2008-2009 recession, when FCA’s predecessor, the Chrysler Group, went bankrupt and required a federal bailout to stay in business. The ratification bonus would have been $3,000, down from $3,500 for the 2011 contract.
As part of the agreement, Fiat Chrysler has offered the UAW a more detailed rundown of which plants will get new models and the jobs associated with that work. Automakers book revenue when they ship vehicles to dealers, and 18 of the company’s 28 North American facilities are in the U.S. At the end of September, Fiat Chrysler said it had a 76-day supply of vehicles, or about 590,503 cars and trucks. The union claims to have secured “significant gains” in the revised proposal, potentially resolving a few of the issues that caused 65 percent of FCA’s 40,000 members to shoot down the initial agreement. In the past decade, strikes by the UAW have been infrequent, with the previous two in 2007 when employees struck General Motors for a couple of days and Chrysler for 6 hours.
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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.
