September 30, 2015 / 10:05 PM / 2 years ago

Auto union skids toward clashes with Detroit Three over pay

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

KOKOMO, Ind. (Reuters) - The United Auto Workers union is skidding toward clashes with at least two of Detroit’s Big Three automakers, as rank and file workers reject compromises on wage increases, benefits and work schedules that their leaders had urged them to accept.

A majority of about 40,000 UAW workers at Fiat Chrysler Automobiles NV(FCAU.N) appear to have voted against a proposed four-year labor agreement hammered out by UAW President Dennis Williams earlier this month, union officials said Wednesday.

A UAW spokesman said the union wouldn't disclose the vote count until after an assembly plant in Belvidere, Ill. completes voting this evening.

Separately, the UAW’s top negotiator at Ford Motor Co (F.N) on Tuesday said he has authorized a strike as early as Sunday by 7,500 workers at a factory near Kansas City, Mo. that builds the company’s best-selling F-150 pickup truck, a linchpin of Ford’s global profits.

Analysts said the move by UAW Vice President Jimmy Settles is in part a signal to rank and file members about his readiness to hit the company hard if management does not agree to UAW demands.

The UAW’s expected defeat at Fiat Chrysler and the threat of conflict at Ford, a company that has cultivated peaceful labor relations over the past 30 years, reflect growing discontent among American workers over stagnant pay.

“Everything costs more and it’s going up, but not my pay,” said Gary Spangler, a 22-year veteran at Fiat Chrysler’s transmission plant in Kokomo, Indiana. He said he voted against the proposed contract.

Veteran UAW autoworkers have not had a base wage increase in a decade. Williams and other UAW leaders, wary of losing more auto jobs to Mexico and non-union factories in the southern United States, portrayed the Fiat Chrysler deal as a fair balance of more equitable pay and investments in U.S. plants.

To be sure, as U.S. unions have lost members and gained more global competition, they have tended to call fewer strikes. In 2014, there were 11 major work stoppages, according to the U.S. Department of Labor, down from 15 the year before. In 1952 there were 470 major strikes.

But like counterparts elsewhere, UAW leaders may have underestimated rank and file determination in industries from fast food to airlines to get significant raises now.

Williams has called 300 local union leaders to Detroit Thursday to discuss how to respond to the Chrysler contract's rejection. The union’s options include calling for walkouts at Fiat Chrysler factories, extending the current contract to allow time for more bargaining, or turning to Ford Motor Co or General Motors Co (GM.N) to hammer out a pact that can serve as a template for the other two.

The UAW and the Detroit Three could still conclude this round of bargaining without disruptions to production.

But the failure of the proposed Fiat Chrysler agreement to win rank and file support is a stinging reversal for a union that over the past decade convinced members to accept painful cuts as GM and the former Chrysler went through government-funded bankruptcies.

Now, Detroit’s profits are robust thanks to strong sales of the trucks and sport utility vehicles UAW members build, and union members told Williams earlier this year to demand an end to a so-called two tier wage system, in which recently hired workers earned about $19 an hour, while workers hired before 2007 earned base wages of $28 an hour.

The proposed Fiat Chrysler pact would have narrowed the pay gap between top tier and lower tier workers to about $5 an hour, but not eliminated it.

Delviagene Colter, a Kokomo transmission plant worker in the lower pay tier, said she voted for the agreement. "In four years, we could fight for more," she said. "It takes time. You can't have everything all at once."

Other workers at the factory in central Indiana said they were disappointed the proposed agreement did not address work schedules that compel many workers to alternate day and night shifts.

“They hate that alternative work schedule with a purple passion,” said Carl Greenwood, president of UAW Local 685 which represents about 7,000 workers at four Fiat Chrysler transmission plants in and near Kokomo.

The Kokomo area factories are prime targets if the union opts to strike, because they make engine and transmission components used in many of the company's most popular U.S. models.

Reporting By Bernie Woodall. Writing by Joseph White and Bernie Woodall; Editing by Christian Plumb

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