UAW, Fiat Chrysler reach tentative contract agreement – USA TODAY
DETROIT — The thorny issue of a two-tier wage structure and the need to address health care costs are addressed in a tentative agreement reached Tuesday evening between the UAW and Fiat Chrysler Automobiles that affects the company’s 39,000 unionized employees.
In a hastily called news conference in Detroit, Fiat Chrysler CEO Sergio Marchionne and UAW President Dennis Williams confirmed they have reached another four-year agreement that must be ratified by the union membership.
The two men said they will not release details ahead of meetings with union leadership, who will in turn take the terms to their locals.
But in broad strokes, Marchionne said the inequity of paying entry-level workers a lower wage for the same work, a disparity referred to as two-tier wages, is addressed in the agreement with the goal of ending it over time.
“There were some broad concepts that underpinned the negotiations, one of which had to do with the inequitable nature of this tier one arrangement that we have had in our system now since 2007,” Marchionne said. “So, I think that the team has crafted what I consider to be a very carefully thought through process whereby that issue will go away. And it will go away over time in exchange for which people who are now part of FCA and who will join our organization will get both an opportunity to engage in a trajectory of career development that will actually enjoy … and enjoy their own career projection of actually moving up the chain of leadership.”
Also key to the pact is the need to reduce health care costs. Williams has made public his vision of a health care coop that pools the active workers at all three companies for purchasing clout in dealing with heath care providers in an effort to get cost savings. It is an idea he said is being discussed with Fiat Chrysler as well as Ford and General Motors.
News of the agreement came about 19 hours after the union and company agreed to extend the current four-year contract beyond its expiration time of Monday at 11:59 p.m. ET.
Williams said the tentative agreement sets a pattern he feels GM and Ford can match, but suggested he will seek more economic gains from the larger and more profitable companies.
On Sunday, Williams decided to concentrate on FCA where he and Marchionne hammered out an agreement that the union hopes will provide a pattern for General Motors and Ford, at least on the economic issues. Marchionne canceled plans to attend the Frankfurt auto show to take part in the bargaining.
The union’s priorities have been to erase or shrink the gap between the wages paid to workers hired before and after 2007. Newer workers could earn up to $19.28 an hour under the current contract, while their more senior co-workers earn about $28.50, a rate that has not been increased in the last two contracts, covering nearly a decade.
Williams also expressed interest in reducing the automakers’ health care costs by placing UAW workers, and possibly white-collar workers, from all three companies into one pool to purchase coverage at a lower cost than the companies currently pay.
Negotiations continue at GM and Ford, but they can only proceed so far without Williams. The threat of a strike was alleviated at the two companies when UAW leadership extended the Ford deadline Monday afternoon. General Motors followed suit at 9 p.m. Monday night.
The UAW’s selection of Fiat Chrysler as the lead target among the Detroit Three on Sunday was viewed as an odd choice by some because the union has typically selected the financially healthiest automaker and Fiat Chrysler’s profits have been the smallest of the three.