Despite winning the first raise in 10 years for long-time union members and employees hired during the post-recession expansion of the FCA U.S., the United Auto Workers is bracing for a potential fight over ratification of the new contract, which some members complain has not closed the gap between first and second-tier workers.
The ratification fight could be particularly sharp in plants such as the Dodge City Truck plant in Warren, Michigan, staffed by members of UAW Local 140 and the Jeep manufacturing complex in Toledo, Ohio, staffed by members of UAW Local 12 where the contract’s lack of future employment guarantees are expected to become an issue.
Both the Jeep complex and the truck plant are facing the loss of existing product and while both plants are promised additional products, the commitments haven’t been firmed up yet, union officials acknowledged after a meeting in Detroit of local union leaders from around the country. The ratification votes will take place over the next week.
The UAW executive board and local union leaders endorsed the union’s tentative agreement with FCA U.S, which includes raises for both traditional and new employees, a richer profit-sharing plan and a new system of bonuses for meeting quality and productivity goals.
The contract falls short of bridging the union’s pay gap between the traditional employees hired before 2007 and new employees hired in the aftermath of the recession in which FCA’s predecessor, the Chrysler Group went bankrupt and required a federal bailout to stay in business.
“We set the stage for the people that come after us to finish,” the jobs. The contract also includes adds job classifications so workers will have a chance to bid for other jobs that pay slightly more, he said.
The new contract includes a 3% pay increase for “traditional” workers who started work at FCA U.S. before 2007. Traditional workers now get between $28 per hour for assemblers and $32.71 for tool and dies makers. The 3% pay increase will be repeated in the third year of the contract.
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Traditional workers will get a 4% lump sum payment in the second and fourth year of the contract.
Workers on the second tier hired after 2007 will also get a pay increases. Workers will now start at $17 per hour rather than existing $16 per hour and increase each year of the contract to $22 per hour.
Workers with three or more years of seniority who don’t fit into the traditional category will rise from $21 per hour to $25.30 per hour.
All 39,000 workers will also collect a $3,000 signing bonus.
The profit sharing formula also has been revised so each worker will get $800 for every 1% in profit margin generated by the company in North America.
(Click Here for more details about the tentative deal between FCA and the UAW.)
FCA U.S. also promised the UAW it would invest $5.3 billion in new products and in its factories in the U.S. over the life of the contract.
The union also managed to reclaim contract items lost during the recession, such as the Easter Monday holiday and double-time pay for Sundays, UAW President Dennis Williams told reporters after the meeting of the local union presidents.
“Sundays are important to us,” said Williams.
The contract also allows the company the flexibility to build more of its most profitable vehicle, according to the union. The union also managed to protect the health-care benefits of its employees despite agreeing to a new co-op system for purchasing health-care services.
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“The plans are exactly the same,” Norwood Jewel, the union’s top bargainer, said after a meeting of the local union leaders. Williams also said he believes the union’s agreement will avoid the Cadillac Tax that will be imposed on expensive health care.