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Marchionne Wants to Eliminate 2-Tier Wage Structure at Chrysler

“Economic disparity…cannot go on indefinitely.”

by on Oct.28, 2011

CEO Sergio Marchionne is signalling Chrysler must find a way to eliminate the 2-tier union wage structure.

Despite the significant cost savings it is bringing to the smallest of the domestic automakers, Chrysler CEO Sergio Marchionne signaled that the maker’s two-tier wage structure is something he plans to eliminate in the not-too-distant future.

About one in eight of Chrysler’s 26,000 union workers in the U.S. currently fall into the second tier, earning about half as much as more senior members of the United Auto Workers Union – a figure expected to grow to at least one in four by the time the newly ratified 4-year UAW contract expires in 2015, said Marchionne during a conference call.

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The union failed to eliminate the two-tier structure during its recent contract talks with Chrysler, General Motors and Ford, though it did win so-called “new hires” a modest increase of about $3 an hour in wages and some additional benefits.  But in an unexpected turn, Marchionne suggested that having multiple grades is “structurally undesirable.”


Coming Down to the Wire: Contract Talks Focusing in on GM

Union reportedly seeking “signing bonuses” of up to $10,000.

by on Sep.12, 2011

GM CEO Dan Akerson and UAW President Bob King shook hands at the opening of contract talks, in July.

Contract talks between the United Auto Workers Union and domestic carmakers are fast approaching the Sept, 14 deadline and UAW negotiators are pushing to wrap up the talks with General Motors and Chrysler first before taking on Ford – the only company the union is legally able to strike this year.

With all three Detroit makers reportedly unwilling to budge with new pay increases or added benefits, labor bargainers are struggling to find something they can take home to members – and are pushing for “signing bonuses” of as much as $10,000 a worker.

Company officials, meanwhile, are dangling the prospect of new U.S. jobs – while that carrot is offset by a stick that threatens to move even more UAW work out of the country.

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There had been much speculation that the UAW would first target Ford, as it is considered the healthiest of the domestic makers – and because the possibility of a strike would appear to give the union more leverage that it might have at GM and Chrysler.  Under terms of their 2009 federal bailouts, those two makers cannot be struck and, should negotiations deadlock, a final decision will be made by an outside arbitrator. But that isn’t how things seem to be working out.


Hyundai’s Krafcik: Public Sees Automakers as Greedy Dimwits

Korean exec calls on industry to enact pay caps, better safety, higher mileage

by on Feb.11, 2009

Hyundai CEO John Krafcik: Who're you calling a greedy dimwit?

Hyundai CEO John Krafcik: Who're you calling a greedy dimwit?

If you’re an automotive executive fretting over the collapse of the U.S. market, the tidal wave of negative headlines and the steady assault of restrictive new government regulations, stop lamenting. You’ve only got yourself to blame, declared John Krafcik, acting CEO of Hyundai Motor America, during his keynote speech at the 2009 Chicago Auto Show.

“There is no other industrial sector with a bigger perception problem,” Krafcik contended.

It’s not unusual for industry executives to use the spotlight of an auto show to identify the industry’s problems and then call for tepid solutions. But Krafcik’s blunt speech was unusually tough on industry leaders, who must take significant steps to reverse both the automotive downturn – and the decline in the industry’s reputation – he argued.

Asserting that “the decade of greed didn’t end in the ‘80s,” the former Ford product executive said American consumers have come to view automotive executives as “dimwits,” who are “unresponsive to consumer needs,” despite the “lavish perks and unnecessary entitlements” they take home.