United Auto Workers union members at Fiat Chrysler Automobiles (FCA) in the US have widely rejected a tentative contract offered by the automaker, dealing a blow to the union's president after he championed the deal as a fair bargain that addressed the inequities workers complained about.
According to marketwatch.com. a tally of local voting results showed defeat of the agreement. It is the first time a tentative national labour 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 automaker. 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 and Ford, the report said.
Hourly workers reportedly 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 healthcare benefits and a lack of US investment commitments also weighed on workers.
The report added the deals defeat became an all but certain outcome when workers soundly rejected the tentative agreement late on Wednesday at a plant in Illinois. A UAW spokesman said the union would publish a final tally on Thursday.
MarketWatch said Williams had hoped to use Fiat Chrysler's contract – which includes a US$3,000 signing bonus and a modified version of its two-tier wage structure – to obtain higher payouts from the financially stronger Ford and GM. Both automakers were already balking at the Fiat Chrysler accord saying it was "too rich" and would erode its competitiveness with the foreign automakers.
But as voting got under way last week, it was clear FCA 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 annoyed over the system that pays new recruits about $9 less than old hands 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.
More grounds for dispute emerged when FCA CEO Sergio Marchionne said the company would move the majority of the automaker's car production to Mexico but boost the US plants with pickup truck and SUV production. Production of the Jeep Cherokee would be moved from the Toledo, Ohio plant to a factory in Belvidere, Illinois, for example.