Sweetened Labor Pact From Fiat Chrysler Gets UAW Nod – Wall Street Journal

Posted: Saturday, October 10, 2015

UAW president Dennis Williams says a sweetened labor agreement delivered by Fiat Chrysler gives entry-level workers a “clearer path” to parity with higher-seniority workers.
ENLARGE

United Auto Workers President Dennis Williams on Friday said he is confident a revised contract proposal with Fiat Chrysler Automobiles NV will be approved by union members, saying it offers newer workers a way to achieve pay parity with veteran factory workers.

His summary of the new offer, which was struck after a previous pact was soundly defeated by a rank-and-file vote, was greeted by a standing ovation from local union officials at a meeting Friday, Mr. Williams said. A membership vote hasn’t been scheduled, and he said the union would soon meet with thousands of workers to present specifics of the plan, which UAW officials called “one of the richest ever negotiated.”

His confidence wasn’t shared by some union workers. Alex Wassell, who works at a Fiat Chrysler plant in Warren, Mich., said, “I’m of the opinion people should be treated fairly and should be compensated the same, and it should be done within four years” not the eight years in the revised proposal.

Another rejection would be a severe blow to Mr. Williams, who supported an initial proposal that was rejected by a nearly two-thirds majority of those voting last week. It was first contract proposal to be voted down since the early 1980s. Workers had said they were unhappy with the proposal’s wage increases, health care and future factory investments.

Returning to the negotiating table with Fiat Chrysler has delayed potentially tougher negotiations on the same wage issue with General Motors Co.
GM


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and Ford Motor Co.
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Both are in much strong financial positions than Fiat Chrysler.

Mr. Williams said the new Fiat Chrysler proposal improves on the original in two ways: It eliminates language involving a health-care purchasing cooperative seen by union members as likely leading to medical-expense increases, and it lays out factory investments for the next four years that would lead to a net 100 new union jobs at U.S. plants.

Mr. Williams also said the revised deal offers a more concrete step toward eliminating a controversial two-tier compensation structure that paid workers hired after 2007 about $9 an hour less than those hired before the financial crisis.

The new pact sets a new top wage for post-2007 hires that would see them earn the $29 an hour pay now received by higher-seniority factory employees.

“Our thought process was always bridge the gap,” the Mr. Williams said on Friday. “The membership wanted a clearer path. They no longer want to be considered second-class citizens.”

If approved, the proposal would give some workers hired prior to Chrysler’s bankruptcy in 2009, an immediate wage increase to $28 an hour. Others will have to wait up to eight years to reach the top pay level, and that extended timetable could be a sticking point for more recent hires.

Getting Fiat Chrysler workers to support the deal is the first step. Mr. Williams has to sell the increases to Fiat Chrysler’s larger rivals. Labor costs at GM and Ford are roughly $10 an hour higher that at Fiat Chrysler or Japanese and South Korean firms with factories in the U.S.

GM and Ford bargainers hope to close this wage gap and want to wring health care concessions in exchange for higher wages, say people familiar with their thinking.

In addition to the higher pay maximum for newer workers, Fiat Chrysler’s revised pact offers a richer signing bonus for workers with more than eight years’ experience; and a detailed list of plans for 23 factories and facilities covered by the four-year accord.

In a letter summarizing the proposed contract’s highlights, Mr. Williams said the requirement for health-care cost wouldn’t go away, although the co-op proposal was eliminate. “Although we remained committed to finding smart solutions to our health care problems, we listened to your concerns,” he wrote.

The labor chief warned members that they need to make changes if they are to maintain the generous benefits the contract affords them. “Today, our health care costs about $8 an hour and by 2019 we project it will reach $13 to $14 an hour.”

Write to Christina Rogers at christina.rogers@wsj.com and Jeff Bennett at jeff.bennett@wsj.com

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