DETROIT (Reuters) - United Auto Workers union members at Fiat Chrysler Automobiles NV’s (FCAU.N) (FCHA.MI) 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.
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.
A UAW spokesman declined to comment until all plants had voted. A Fiat Chrysler spokeswoman also declined to comment.
Bill Parker, a 41-year production worker at Fiat Chrysler, said workers had expected the company and the union to adhere to an agreement made in 2009 that a 25 percent cap on the number of second-tier workers would be enacted in 2015. Doing so would have increased wages dramatically for 20 percent of Fiat Chrysler’s workers.
Arthur Schwartz, a labor consultant, said: “If the reason for the rejection is the cap, then we are going back to Square One. It really behooves the UAW to get this deal ratified.”
Editing by Matthew Lewis