Different pay for new hires under latest UAW-FCA deal
The latest four-year tentative agreement between the United Auto Workers and Fiat Chrysler Automobiles NV includes a different pay structure for some new hires than current employees doing the same work.
If the proposed deal is ratified by membership next week, new employees for the company’s temporary workforce as well as new hires for its Mopar operations would have different wage progressions with lower top wages than current employees. The deal also allows the company to rely more on temporary workers.
“Fiat Chrysler had an amount it wanted to pay for UAW labor over the next four years,” said Kristin Dziczek, Center for Automotive Research director of the Industry & Labor Group. “To sweeten the deal, you had to take something out somewhere.”
Paying different wages for different work isn’t uncommon under classification systems in the industry. But different wages for the same work has led to divisions on factory floors under a contentious two-tier pay system. The latest deal looks to eliminate that division with a path to $29 an hour or more for hourly production workers.
Temporary workers under the new deal no longer would receive profit-sharing bonuses, which were part of the first rejected agreement. They do receive time-and-a-half for overtime and double-time for Sunday and holidays. Both tentative agreements between the union and automaker included different rates for new temporary hires.
Industry insiders see the lower wages and changes as ways for the automaker to help reduce the impact of the deal that would essentially eliminate the two-tier pay system for workers over eight years and provide pay raises for both tiers.
“They had to do whatever they could do for the current workforce to get it ratified,” said Art Wheaton, labor expert with the Worker Institute at Cornell University. “If they reject it the second time, I have no idea what they’re going to do because then the bargaining committee has zero credibility.”
New hourly production workers it appears would have the same progression of pay hikes over four years as current workers with less than one year seniority, but the contract does not specify if the new hires automatically are put onto the same eight-year progression to $29 an hour. However, some have argued that current workers aren’t promised the progression either, given it’s only a four-year contract.
New axle workers also would be paid the same hourly rate over four years as those currently on the line, but would have no assurance of annual wage increases once they reach the top rate of $19.86 per hour like current workers at the end of the contract.
New temporary hires and those hired at Mopar facilities would be put in lower pay structures over eight years than current workers, who would find themselves in new pay schedules be grouped into a new pay schedule with higher hourly wages.
The company is only expected to create about 100 new positions under the four-year deal. But an undetermined number of retirements and targeted buyouts would mean their replacements in the company’s Mopar operations would start at lower levels.
A union spokesperson was not immediately available to comment. A Fiat Chrysler representative declined to comment.
“As the ratification process is underway, we are not commenting on any aspect of the contract,” said Fiat Chrysler spokeswoman Jodi Tinson.
The union’s summary of the contract, known as a “highlighter,” did not include the increase in temporary workers but did mention different wages for new Mopar workers to address “future competitiveness.”
The latest deal, on which members will vote Oct. 20 and Oct. 21, would allow Fiat Chrysler to significantly increase its use of temporary workers, which the company can pay up to roughly $10 an hour less than its full-time assembly employees.
Under the tentative agreement now on the table, the company could use temporary workers any day of the week instead of just Mondays, Fridays, weekends and holidays. Bloomberg News reports the company could double the use of temporary staff from 4 percent of work hours to 8 percent, citing an anonymous source familiar with the matter.
Temporary workers traditionally are used during high-demand production cycles, or during periods of high absenteeism and vacations.
“You use them in any situation where you’re not sure your volume and manpower needs in the plant will stay at that level,” said Arthur R. Schwartz, a longtime negotiator at General Motors Co. and president of Ann Arbor-based consultancy firm Labor and Economics Associates.
The number of temps allowed at each facility, according to the deal, would be based on a facility’s average absences “calculated as a percentage of total absenteeism multiplied by the number of full-time employees.”
Under the latest deal, current temporary workers hired after Oct. 27, 2007, would earn between $17 an hour and $22 an hour. Those hired after under the new contract would start at less than $16 an hour and top out at $19.28.
One of the largest changes from the failed tentative agreement to the latest tentative agreement involves the company’s Mopar workers, including workers in Center Line and Warren.
Under the new deal, second-tier workers currently at Mopar facilities would have a similar path to a roughly $29 an hour or more top wage as their production counterparts. Under the failed deal, Mopar workers would have topped out at about $22.
However, workers hired after the deal goes into effect would top out at about $25 an hour after eight years, about $4 less than those currently on the line.
New axle workers would receive the same $16.25-$19.86 hourly rate over four years as those currently on the line. But the latest contract doesn’t provide for a 3 percent annual boost in the following four years for new workers, raises that are spelled out for current workers.
Looking at the overall contract, Dziczek said, “There remain differences between workers hired before 2007 and after 2007. And it appears those hired after 2015 will have a different set of conditions.”