Fiat Chrysler U.S. union workers deal more blows to tentative pact

Mon Sep 28, 2015 4:57pm EDT
 
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By Bernie Woodall

DETROIT (Reuters) - United Auto Workers union members at Fiat Chrysler Automobiles NV's (FCAU.N: Quote) (FCHA.MI: Quote) U.S. factories are increasingly rejecting a proposed national labor agreement recommended by union leaders, expressing discontent with a compromise that sacrificed larger wage hikes for future investment in U.S. operations.

By Monday, two large UAW locals in Kokomo, Indiana, and Detroit had resoundingly rejected the tentative agreement, joining the wave against the deal in previous votes by workers at several Michigan plants. The latest rejection was by 77 percent of production workers in Kokomo and 64 percent at the Jefferson North Assembly Plant in Detroit.

Even if the contract is ratified, UAW and company leaders will have to work with a sizable cohort of workers who believe they are not getting a fair deal.

Labor experts say they cannot remember a full national contract ever being rejected.

If the proposed contract is rejected, the union could renew talks with Fiat Chrysler, strike at the company's plants, or turn attention to General Motors Co (GM.N: Quote) or Ford Motor Co (F.N: Quote).

The proposed deal reached on Sept. 15 by UAW and Fiat Chrysler negotiators would narrow but not close a pay gap between first-tier workers who currently make about $28 per hour and second-tier workers who now top out around $19 per hour.

Fiat Chrysler has the highest share of second-tier workers, 45 percent of its production workforce, and therefore has lower labor costs. Ford and GM negotiators will want to narrow if not eliminate this labor cost advantage for Fiat Chrysler. About 28 percent of workers are Ford and 20 percent at GM are in the lower tier.

Union workers voting Monday through Wednesday include those at Fiat Chrysler plants in Toledo, Ohio, in Sterling Heights and Warren in Michigan and in Belvidere, Illinois. There is uncertainty about product plans at those plants, which raises questions about job security.   Continued...

 
A new Fiat Chrysler Automobiles sign is pictured after being unveiled at Chrysler Group World Headquarters in Auburn Hills, Michigan May 6, 2014. REUTERS/Rebecca Cook