As the United Auto Workers’ top officers prepare to present a second tentative contract with FCA U.S. to the union’s Chrysler Council, they are already beginning to run into opposition from union members who scuttled the first contract.
The proposed agreement, which is supposed to set the UAW’s pattern for bargaining at General Motors and Ford, is expected to include a larger pay increase for second-tier workers. The new wage proposal would gradually move second-tier workers to close to $29 per hour over eight years. The raise represents a 53% bump for workers now getting the second-tier maximum of $19 per hour.
UAW President Dennis Williams has said the new deal addresses many of the concerns workers had about the rejected contract.
First-tier workers also will get the 3% raise in the first and third year of the contract, as specified in the first contract, which was overwhelmingly rejected. The new contract proposal, however, does not include re-instatement of the cost of living allowance that was dropped from the union’s contract with the Chrysler’ Group, FCA’s predecessor, during its 2009 bankruptcy. The proposed contract also doesn’t include any pension improvements.
The profit-sharing formula was also modified slightly to reduce payouts to pay for wage improvements and the language in the new tentative agreement was clarified to specify that the current health-care benefits remain intact.
The retention of the two-tier system, the lack of COLA, vague language around health-care were all factors in the defeat of the first tentative agreement by an overwhelming margin of more than 10,000 votes.
(Last-minute deal averts strike at Fiat Chrysler. For more, Click Here.)
Meanwhile, the union has been unable to silence critics of the union’s bargaining strategy, noting that it has still hasn’t eliminated the wage gap. Roughly 43% of FCA’s unionized workers are assigned to the second tier “or in progression” under the contract language and a key element of the FCA’s bargaining strategy has been to protect the gap between first and second tier workers.
Critics of the contract also have noted that the failure to bring second tier pay up to parity would have the effect of permanently lowering the wages paid unionized workers as workers hired before 2007 quit or finally retire and are replaced by lower paid workers.
Sergio Marchionne, the chief executive officer of the Trans Atlantic automaker, has said one of his objectives in this year’s negotiations was to lower the base wage and increase the variable compensation. It appears he fell short of his objective.
Moreover, it appears union bargainers and Marchionne’s acolytes in the FCA’s executive ranks have underestimated the depth of the alienation of the company’s blue-collar workers, observers said.
(For more on why the original FCA-UAW contract was rejected, Click Here.)
The alternative work schedules, lost seniority and an arbitrary attendance policy also have led workers to use the contract ratification process as way to register a protest over working conditions that have grown more onerous in their eyes.
Critics of the first agreement are already circulating fliers and Facebook posts, urging union members to “vote no until they get it right.” Among the key demands are an end to two-tier system, reinstatement of COLA and time and half pay for any work after 8 hours as well as the dismantling of the alternative work schedules that FCA use to pump up production.
Worker were also angered by Marchionne’s flippant comments about shifting all of the FCA’s passenger car production to Mexico, a move that could come back to haunt union members in the future.
(UAW seemed likely to target profitable Jeep plants first. Click Here for more.)
Critics of the new tentative contract are also preparing to challenge any effort by union leaders to speed up the ratification voting on the second tentative agreement.