Fiat Chrysler Automobiles Workers Reject Union Contract

United Auto Workers at Fiat Chrysler Automobiles officially rejected a proposed contract that would have raised wages for workers, but didn’t eliminate the tiered pay system for veteran and newly hired workers.

Reuters reported that 65 percent of the 40,000 union workers voted against the contract. Reports said that workers voiced concerns that the contract didn’t raise wages enough; created a lower-paid, “third” tier for parts and axle operations workers; and few details were provided for the health care co-op.

FCA relies heaviest among domestic automakers on lower-paid Tier 2 workers. Approximately 45 percent of hourly workers at FCA plants are Tier 2 workers.

It’s unclear what the UAW, which represents workers at Ford, General Motors and FCA plants, will do next. The union could re-negotiate a contract with FCA, turn its attention to talks with Ford or GM or call for a strike or reduced labor at FCA plants.

FCA posted the following statement after the contract was rejected:

FCA US is disappointed that UAW members voted not to ratify the tentative agreement.

The bargaining teams on both sides worked hard, for many days and nights, to craft a transformational agreement that would adequately reward the commitment of our workforce while ensuring the Company’s continued success and competitiveness. Striking the right balance in these two objectives has been the most difficult thing to accomplish in these negotiations, but after many hours of dialogue and debate between the UAW and FCA US leadership, the Company felt that a just and equitable compromise had been reached.

The memories of our near-death experience in 2009 are vivid to this day in the minds of most of us at FCA. A large number of new employees have been brought into the Group since then who, thankfully, did not have to endure the pain and sacrifices that were required of the workforce then.

But it is that knowledge and those memories that continuously reinforce the FCA leadership’s resolve to never let those events repeat.

While significant progress has been made since the events of less than seven years ago, much more work remains to be done and challenges remain while new, significant ones surface. The cyclical nature of the automotive business demands that while we must recognize the need for rewarding employees during times of prosperity, we must also protect against the inevitable market downturn. This agreement accomplished both of these objectives.

The tentative agreement was designed to yield a strong and competitive FCA US, thus providing stability for our workforce and opportunity for future growth and investment in an increasingly complex global marketplace.

The Company will make decisions, as always, based on achieving our industrial objectives, and looks forward to continuing a dialogue with the UAW.

The union released a statement from President Dennis Williams:

“As I said at the press conference: “What I love about our organization most of all is that no matter what we do, what action we take, the ultimate decision and the power of the union is our members and they make the final decision.”

That is the design of our constitution and who we are.

We will gather the issues together; notify FCA that further discussions are needed.

We don’t consider this a setback; we consider the membership vote a part of the process we respect.

We will be meeting with the UAW-FCA National bargaining committee and council to discuss the issues.”

Pass the popcorn.