UAW Members Widely Reject Fiat Chrysler Contract Deal
October 01 2015 - 6:22AM
Dow Jones News
By Jeff Bennett And Christina Rogers
United Auto Workers union members widely rejected a tentative
contract offered by Fiat Chrysler Automobiles NV, dealing a blow to
the union's president after he championed the deal as a fair
bargain that addressed the inequities workers complained about.
A tally of local voting results showed defeat of the agreement;
however, the UAW has yet to officially release a statement
confirming the vote.
It is the first time a tentative national labor contract has
been rejected by UAW members in 30 years, underscoring the level of
discontent among factory workers and uncertainty about product
commitments from the U.S.-Italian auto maker. UAW President Dennis
Williams now needs to go back to the bargaining table to redraw an
agreement that can be used as a pattern with General Motors Co. and
Ford Motor Co.
Mr. Williams is slated to huddle with hundreds of UAW local
officials on Thursday in Warren, Mich., to discuss the union's next
step and whether flash-point issues with his membership can be
resolved if he were to return to bargaining with Fiat Chrysler
Chief Executive Sergio Marchionne.
Hourly workers cited several problems with the proposed pact,
including frustration with a lack of clarity when a two-tier pay
structure would be eliminated. Concerns about health-care benefits
and a lack of U.S. investment commitments also weighed on
workers.
"We built 5,111 vehicles last year in Toledo and we got a
catered meal of hot dogs and hamburgers as our thanks," said Phil
Reiter, 44, who has been working at the Toledo, Ohio manufacturing
plant for two years. "This is our time now. The UAW has given back
and given back, making concessions after concessions. I think
Sergio may have a hard lesson to learn here but we are ready for
that."
The deals defeat became an all but certain outcome when workers
soundly rejected the tentative agreement late Wednesday at a plant
in Illinois. A UAW spokesman said the union will publish a final
tally Thursday morning.
"This is a tremendous embarrassment here for the UAW and I think
Mr. Williams has no other option but to go back and try and get a
deal done, " said Gary Chaison, a professor of industrial relations
at Clark University in Worcester, Mass. "He is in a real bind. The
younger workers are revolting."
Mr. Williams had hoped to use Fiat Chrysler's contract--which
includes a $3,000 signing bonus and a modified version of its
two-tier wage structure--to wring higher payouts from the
financially stronger Ford and GM. Both auto makers were already
balking at the Fiat Chrysler accord saying it was "too rich" and
would erode its competitiveness with the foreign auto makers.
But as voting got under way last week, it was clear Fiat
Chrysler workers were taking issue with the UAW's inability to end
the two-tier wage system during the life of the proposed four-year
contract. Workers have been irked over the system that pays new
hires about $9 less than veterans who are doing the same work.
Under the new proposal, assembly line jobs would get a new
starting wage of $17 an hour--about $1 higher than it is now--and
newer hires will top out at about $25 an hour. Workers hired within
the last eight years, whose hourly pay is now capped at $19.28,
would also get raises under the new wage progression but it would
take longer for them to top out.
UAW Local 685 President Carl Greenwood said his local voted down
the contract in large part to the two-tier wages. He will now
travel to the Detroit area Thursday to be briefed on the union's
next steps.
"Let's face it, if you and I work on the line and you get $28
and I get $16 and we do the same job, there is nothing fair about
that," said Mr. Greenwood whose local represents workers at the
Kokomo, Ind. transmission plant. "I wanted to see the second tier
have a road map to get to traditional wages and I don't mean over
eight to 10 years, but in this contract."
A second flash point emerged when Mr. Marchionne said the
company would move the majority of Fiat Chrysler's car production
to Mexico but bulk up the U.S. plants with pickup truck and SUV
production. For example, production of the Jeep Cherokee would be
moved from the Toledo, Ohio plant to a factory in Belvidere,
Ill.
Write to Jeff Bennett at jeff.bennett@wsj.com and Christina
Rogers at christina.rogers@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 01, 2015 07:07 ET (11:07 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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