RPT-US auto union faces tough road to salvage failed contract – Reuters

Posted: Monday, October 05, 2015

(Repeats story first published Oct. 2; updates paragraphs 3-4
to reflect weekend news)

By Bernie Woodall and Nick Carey

DETROIT/CHICAGO Oct 4 (Reuters) – Mounting discontent among
the United Auto Workers rank and file will complicate its
leaders’ bid to recover from the defeat of a proposed labor
agreement with No. 3 U.S. automaker Fiat Chrysler Automobiles NV
, UAW members said Friday.

UAW President Dennis Williams and its vice president for
Fiat Chrysler, Norwood Jewell, told local union leaders during a
meeting in Detroit Thursday evening that negotiators would
convene Friday and approach the automaker, people familiar with
the discussions said. Williams and other top union leaders
didn’t discuss a strike at Fiat Chrysler in the near term, they

Over the weekend, the UAW did manage to avert a strike at a
Ford Motor Co pickup truck and commercial van factory near
Kansas City, Mo. after reaching a tentative local agreement.

Williams and the UAW did not elaborate over the weekend on
what their next moves will be at Fiat Chrysler after 65 percent
of UAW members rejected the proposed four-year deal. Williams
said Thursday he would “notify FCA that further discussions are
needed” and consult with UAW bargainers at the company.

Williams and the UAW made no public statement Friday about
their next moves at Fiat Chrysler after 65 percent of UAW
members rejected the proposed four-year deal. The union did not
immediately return a phone call seeking comment on whether
negotiators had convened or approached the company on Friday.

The failure of the Fiat Chrysler contract highlights the
tightrope that Williams and the UAW are walking. A strong
recovery at the once-ailing Detroit automakers has failed to
vanquish threats to union jobs from lower-wage workers in Mexico
and non-union factories in the Southern United States.

The contract agreed with Fiat Chrysler tempered wage demands
in return for promises of $5.3 billion in investment in U.S.
factories. But the effort to trade off short-term gains for
long-term security backfired.

Fiat Chrysler is expected to resist boosting U.S. labor
costs beyond the levels originally agreed, people familiar with
the situation said. The company said on Thursday that its
decisions would be based on its “industrial objectives.”

The tentative contract provided for raises for both veteran
workers currently earning $28 an hour, and recently hired,
second-tier UAW members who earn about $19 an hour.

But it did not close the pay gap between the two groups, as
many lower-paid workers had hoped, UAW members said. It also
provided relatively modest raises for higher-paid veterans who
made concessions on wages and benefits during three prior rounds
of bargaining as the Detroit automakers scrambled to survive.


UAW officials and rank and file members told Reuters the
contract lost support among Fiat Chrysler’s 40,000 UAW workers
because it failed to lift lower-paid workers into the top tier
within the four-year span of the contract. Confusion over
proposed changes to the union healthcare plans also undercut
support, local leaders and union members said.

“The FCA contract did not resolve the two-tiered wage
system, it only made it worse,” said Scott Houldieson, a local
UAW official at Ford’s Chicago assembly plant. “The pay
increases included in the contract are only those that we agreed
to give up in 2009.”

UAW workers and officials at General Motors Co and
Ford plants in the U.S. said a contract patterned on the
rejected Fiat Chrysler deal could face opposition if taken to a
vote at those companies.

“Our members see this as our time to get back some of the
things that they have given up. The expectations of members were
very high going into this,” said Brian Hartman, president of the
UAW local that represents workers at GM’s Fort Wayne, Indiana
pickup truck factory.

“As it’s written, there’s not a chance” of a similar
contract winning approval at GM, he said.

Nuts-and-bolts issues such as attendance policies, which it
tightened, also soured workers on the deal, union members said.

“The new attendance policy is even more strict than the one
that most people think is too harsh already,” said Brett Ward, a
worker at the Sterling Heights Assembly Plant near Detroit where
the Chrysler 200 is made. “The steps toward discipline are fewer
and it’s easy for people to get into trouble, and could lead to

Another unresolved area of tension is the ongoing desire of
the Detroit Three to shift more production south of the border.

UAW leaders have said Ford plans to move production of the
Focus compact car from a factory in Wayne, Michigan to Mexico.
The company has confirmed only that the Focus will move out of
the Wayne plant. Fiat Chrysler has separately indicated it will
move production of certain cars to Mexico.

“We’ve made concessions, we’ve done what was necessary to
keep the company profitable and … they turn around and say,
‘Thanks sucker, we’re going overseas,’ said Mary Springowski,
49, who’s worked 25 years at Ford’s engine plant in Cleveland.

(Additional reporting by Meredith Davis)


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