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UAW-FCA deal sets $29 top wage for entry-level workers

Michael Wayland
The Detroit News

Under a new tentative deal between the United Auto Workers and Fiat Chrysler Automobiles NV, entry-level workers will receive a substantial increase in their top wage.

Second-tier workers — now known as “in-progression” — would earn as much as $29 an hour with the proposed deal, up from $25.35 an hour under the previous rejected contract, according to a source familiar with the situation who is not authorized to speak on record because the union hasn’t briefed workers on the tentative deal.

Details of the contract are scheduled to be made public Friday, after union leaders from across the country gather in Warren to discuss and vote on the new deal, which was reached before an 11:59 p.m. strike deadline Wednesday, a week after 65 percent of membership rejected the first contract.

The top wage for the newer workers would be roughly $10 an hour more than the $19.28 ceiling that entry-level workers make under the 2011-15 deal.

The source also said the wage increase and bonuses for veteran, or tier-one, workers would remain the same from the first tentative deal. Those workers would receive 3 percent wage increases in the first and third years, with 4 percent lump-sum payments in the second and fourth years of the contract, as well as $3,000 signing bonuses.

Profit-sharing under the new contract also would be tweaked. Under the failed deal, entry-level workers would have received additional money if North American profit margins exceeded 8 percent. Under the new deal, all workers would receive the same annual profit-sharing checks.

It is unclear whether the same pay scale would extend to second-tier workers at axle and Mopar facilities. Under the failed deal, there would have been essentially four wage, or classification, systems: veteran workers at about $30 an hour after raises; tier-two workers topping out at $25.35 an hour; and Mopar and axle operators topping out at $22 and $22.35, respectively.

Spokespeople with the union and automaker declined to comment on the new contract. The union on social media Thursday afternoon described news reports about the new deal as “incomplete.”

“Your UAW FCA National Bargaining Committee focused on your priorities to address pay, health care and job security,” the union said. “Full details will be made immediately available if the UAW National Chrysler Council votes to send the agreement to you, the membership, for ratification tomorrow.”

Friday’s meeting of union leaders in Warren comes exactly two weeks after leadership met for the first deal, at which UAW President Dennis Williams said he believed the 40,000 members in Fiat Chrysler shops would OK the contract.

Williams early Thursday morning said the new deal “makes real gains” and “addresses members’ principal concerns about their jobs and their futures.

The top wage increases, which were first reported by Bloomberg News, arguably “bridge the gap” between the two tiers of workers for hourly wages, but are expected to allow the company to save money because they don’t have to provide pensions. In addition, health care costs are lower for newer workers.

Bringing the pay of entry-level workers closer to veteran workers — who now make about $28 an hour — was a key demand voiced by members after the first deal was knocked down. Neither of the deals caps the number of people the company can hire as entry-level workers.

Appeasing second-tier workers was particularly important for Fiat Chrysler, which has 45 percent entry-level workers, the highest among the Detroit automakers. General Motors Co. has 21 percent. Ford Motor Co. is at 28 percent.

Kristin Dziczek, Center for Automotive Research director of the Industry & Labor Group, said the two-tier pay system was “just one little piece of a big puzzle” that the union needed to address in a new deal.

There were other reasons members said they opposed the first deal: It didn’t address alternative work schedules enough. Some argued the classification system created a “third-tier.” It did not fully explain a new health care co-op. And it failed to detail $5.3 billion in plant investments that reportedly would move nearly all car production to Mexico in exchange for more profitable pickups and SUVs built in the United States.

Union leaders have continually pledged to clarify and address key concerns raised by members following the first deal’s rejection.

Costell McIntosh, an entry-level worker at Sterling Stamping since 2010, said he supports the $29-an-hour wage progression but is waiting for all details of the agreement to be released until deciding how he will vote.

“That’s nothing to complain about in this day and age,” he said. “You have to be realistic. You have to make progress in increments.”

Union and company negotiators for General Motors Co. and Ford Motor Co. have been waiting in the wings since the UAW announced Sept. 13 that Fiat Chrysler was the “target” company for bargaining. Both automakers indefinitely extended their contracts on Sept. 14, the day they expired.

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