UPDATE - 08/10/15
FCA US has confirmed this morning that it has reached a new tentative agreement with the UAW. Because the agreement is subject to UAW member ratification, Fiat Chrysler Automotive said it cannot discuss the specifics of the agreement pending a vote by UAW members.
A proposed national agreement, which came out of the protracted negotiations between the United Auto Workers Union (UAW) and Fiat Chrysler Automobiles (FCA), has been voted down by UAW members with about 65% of the votes going against the proposal.
As reported by the Detroit Free Press last week, a majority of production workers at Warren Truck Assembly and at the Detroit-based Mack Avenue Engine plant narrowly voted in favor of a proposed national agreement with Fiat Chrysler.
The support gave the UAW its first glimmer of hope that it could convince a majority workers to ratify the proposed new national workers contract.
However, workers at Fiat Chrysler’s Jefferson North Assembly Plant resoundingly rejected the four-year tentative agreement between the UAW and FCA, strking a major blow to the contracts chances of approval nationwide. On Monday last week, approximately one-third of Fiat Chrysler’s workforce was still to vote on the deal, although most of the larger UAW units that had voted had already rejected it.
UAW member demands only partially met
The agreement was set to primarily address grievances the auto workers had with the current two tier payment system that pays entry-level workers far less than traditional workers for doing the same jobs.
Today, tier one legacy workers, who comprise more than half (55%) of FCA’s hourly workforce, earn wages of $28 an hour compared to tier two workers who earn between $16 to $19 an hour.
In the tentative deal, FCA agreed to raise Tier 2 wages to a new range of $17 to $25 an hour, with progressive, annual raises assured over the term of the four-year agreement. But that maximum is still $5 an hour short of the $30 an hour legacy workers are set to earn at the agreement’s end.
Moreover, workers consider the two-tier wage system damaging to shop-floor solidarity and have campaigned for the establishment of a pathway for Tier two workers to achieve full, Tier one pay. The UAW-FCA proposal does not currently address this demand.
Furthermore, the agreement also failed to provide full details of a new health care cooperative and did not provide any clarification regarding Fiat Chrysler’s production location plans. Numerous reports have suggested FCA may be considering moving some of its operations to Mexico.
In previous UAW contracts, a detailed product plan has been the difference between achieving ratification of a contract and not.
According to Autonews, In 2007, General Motors workers held a two day strike over a concessionary contract until the carmaker sweetened the deal and provided a list of product commitments for specific plants.
Where to for UAW and FCA
With voting now completed, and the agreement formally rejected by workers, the FCA and UAW have both announced that they will continue discussions.
UAW President Dennis Williams said Thursday in an e-mailed statement that “further discussions were needed,” without giving a timetable. Fiat Chrysler said last week it was disappointed in the vote but looked forward to a continued dialogue.