Stakes high after UAW workers reject Fiat Chrysler deal

Michael Wayland, and Melissa Burden

The rejection by United Auto Workers members of a tentative contract with Fiat Chrysler for the first time in a generation is pushing leaders of both sides down an unpredictable road that doesn’t guarantee a better deal for the union’s 40,000 members.

Although the union had not released a final tally of national voting numbers late Wednesday, an overwhelming rejection of the contract by Belvidere Assembly workers cemented its defeat, according to an analysis of results by The Detroit News.

A return to the bargaining table could mean contentious talks between the same negotiating committees that had been able to reach the initial deal. The rejection could lead to union strike actions. Fiat Chrysler could threaten to move production of future cars and trucks outside the United States if the UAW is unwilling to bend.

UAW members express anger on social media

“They’re playing Russian roulette with the wrong guy. (Fiat Chrysler CEO) Sergio Marchionne is too much of a gunslinger,” said Art Wheaton, labor expert with the Worker Institute at Cornell University.

“He’ll play it by ear and he’ll do what he wants. He’s playing with a global chessboard, and the UAW doesn’t have that capability.”

The Chrysler Council, which includes local union presidents and bargaining chairs from across the country, is expected to meet in Warren on Thursday to decide its next moves.

“They’re not going to take this agreement back (to members),” said Kristin Dziczek, Center for Automotive Research director of the Industry & Labor Group. “I don’t think they can repackage this and salvage it in any kind of way without going back to the table and getting a new tentative agreement.”

Neither the union nor Fiat Chrysler would comment on the meeting, which comes a day after final national votes were cast at Warren Stamping and Belvidere Assembly. At Belvidere, 65 percent of production workers said “no,” as did 70 percent of skilled trades workers. Warren Stamping numbers weren’t available late Wednesday. It was the first rejection by Chrysler workers since 1982.

Workers and industry officials have said that high expectations, lack of communication and mistrust led to the rejection, and aren’t going to be easy to overcome.

UAW Vice President Norwood Jewell, head of the union’s Chrysler department, told The News on Sunday: “It won’t be the first time. I’ve watched other contracts get turned down. You sit down, listen to the membership and try to figure out is it just misunderstandings … and then go back to the drawing board.”

Strike is ‘big weapon’

The likelihood of a local or national strike for the union against Fiat Chrysler significantly increased following rejection.

“It looks very grim for Fiat Chrysler because I think the membership are way out in left field thinking they were going to get a terrific, great improvement by going out on strike,” Wheaton said, the labor expert from Cornell.

Many union members have been agitating for a strike, almost since negotiations began. This is for the first time since the 2007 talks that workers at Fiat Chrysler and General Motors Co. have the ability to strike; the UAW gave up that right for the 2011 talks as a condition of GM and Chrysler’s government bailouts.

Strikes typically are a last resort, but can be used tactically to satisfy expectations that union leaders put pressure on automakers.

“The strike is the big weapon here, and it puts pressure on both sides,” Dziczek said. “The members are feeling pressure in their pocketbooks, and the company is feeling pressure on not having production running of the line and not getting any money from that.”

A strike could come about in more than one way. The union could call a national strike or target one plant that, if prolonged, would cause a ripple effect on production and cripple operations across a company. That helps the UAW limit strike benefits it would need to pay.

Local unions also could go to UAW leaders and request a strike over local agreements, which was the case for the two Flint plants in 1998. Local plant contracts are negotiated separately from the national contract.

Arthur R. Schwartz, head of the Ann Arbor-based Labor and Economic Associates consultancy firm, doubts the UAW would strike Fiat Chrysler without at least trying to re-bargain.

To get a deal passed, the UAW will have to do a much better job selling the agreement, particularly explaining the proposed health care co-op to members — and why the union agreed to changes to the tier-two pay structure but no cap, Schwartz said.

The two-tier system was particularly contentious for workers like Kenneth McCarthey Jr., who was hired into Toledo Assembly in 2013 at a lower pay scale than senior workers. “I think we should all get paid equal,” he said.

Threats of a strike against Ford Motor Co. already have been raised over dissatisfaction with a local contract at the Kansas City Assembly Plant. That plant produces the money-making Ford F-150. UAW Vice President Jimmy Settles said Tuesday that he received approval from the international union for a strike at the plant by Local 249. The Dearborn automaker was given until Sunday to reach a tentative local contract with the Kansas City local.

In an update to members, Settles appeared to distance himself from Fiat Chrysler negotiations.

“Many aspects of FCA’s current agreement are different than the agreement we currently have with Ford, such as attendance policy, work schedules, vacation language, discipline, job security, apprenticeship testing and progression of entry-level to legacy pay rates, to name a few,” he said.

“In addition, there have been instances in the past where Ford, FCA and GM have even had differing pay scales and rates.”

GM, Ford wait

Industry insiders expect negotiators with the UAW and Fiat Chrysler to return to the negotiating table rather than move on to GM or Ford, which both indefinitely extended their current contracts with the union Sept. 14.

“Usually, when you shake hands with someone and reach an agreement and can’t execute it, you at least give them the chance to do it again,” said Schwartz, a longtime labor-relations executive with GM.

UAW members at GM and Ford are anxiously watching Fiat Chrysler. UAW President Dennis Williams has indicated he would seek more with GM and Ford because they are more profitable.

On its Facebook page, UAW Local 651, which represents GM’s Davison Road Processing Center in Burton, asked members for patience: “While we wait for a tentative agreement, try to keep your mind open and not speculate. Be patient, wait till you have the facts.

“We cannot afford to undermine the bargaining process and the best thing we can do is act and be together and fully support our national bargaining team.”

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Sticking points

Fiat Chrysler workers voiced various reasons they disliked the tentative contract:

■No end to two-tier pay system

■No guarantees of new jobs and lack of specifics on product changes

■Failure to explain proposed healthcare co-op

■No cap on the number of two-tier workers

■No elimination of alternate work schedules

■Changes to attendance policy

■Smaller ratification bonus than in 2011

■Lack of rewards for retirees