Steel Markets

UAW & Chrysler Contract Details Surfacing

Written by Sandy Williams

Details about the UAW tentative agreement with Fiat Chrysler are beginning to come out thanks to a report published Wednesday by the Detroit Free Press.

According to their information and comments during the UAW/FCA press conference, the Tier gap will be narrowed and eventually go away. Tier 2 entry workers will start at $17 per hour (up from $15.78) and increase to around $25 over a period of several years.

Tier one employees, hired before 2007, will finally get a pay raise in the range of 75 to 84 cents per hour (3 percent) in the first and third years of the contract. According to Bloomberg News, the wages plus cash bonuses for tier one would increase from $28 to about $30.

Details on the health care changes are not available but FCA CEO Sergio Marchionne said in a letter to employees: “We have agreed to adopt a comprehensive approach to address rising medical costs. We will partner with the UAW Health Care Development Co-op to explore innovative ways of improving the delivery of health-care benefits in a manner that increases quality, lowers costs and provides better patient care.” All three companies are exploring the proposal by UAW President Dennis Williams to create a health care benefits co-op for current workers that will reduce health costs without raising rates.

The disparity between profit sharing checks at FCA and counterparts at Ford and GM will be addressed by “a new profit-sharing formula that rewards entry-level workers at a higher rate than senior workers kicks when the company achieves certain profit margins,” according to the Detroit Free Press.

A $3,000 signing bonus will be given to workers if the contract is ratified.

FCA has also committed to investing $5.3 billion in U.S. factories. Some of the car production will be moved to Mexico where labor is cheaper and replaced with truck, SUVs and crossovers at U.S. plants. According to the Detroit Free Press the breakdown is $3.4 billion invested in assembly plants, $1.5 billion at engine and transmission plants, and $315 million at stamping plants and $34 million at Mopar parts distribution plants.

The UAW and FCA are keeping details of the agreement quiet so that the union membership can hear them first. The tentative agreement will be presented to the local union leaders for a vote and then to the general membership for ratification. ABC News reports that ratification is likely to be finished by the end of next week.

The UAW will then use the FCA agreement as a template for negotiations at Ford and GM.

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