Report: New UAW Contract Could Boost Tier 2 Pay Up to $29 Per Hour

Aaron Cole
by Aaron Cole

Bloomberg reported (via Automotive News) Thursday that a proposed contract brokered Wednesday night between the United Auto Workers and Fiat Chrysler Automobiles would raise Tier 2 workers’ pay to $29 per hour, up from $25 per hour, after an eight-year, “grow-in” period.

The separation between the two classifications of union employees — veteran Tier 1 and more recently hired Tier 2 — was a major point of contention for the workers, who voted down the proposed contract last week by a margin of nearly 2-to-1.

Roughly 40 percent of FCA’s union employees are Tier 2 workers, a much higher proportion than General Motors and Ford. On average, those employees are paid $9 to $12 less per hour less than workers hired before the recession. The proposed contract, according to the report, would not eliminate the tiered system, but instead bring closer the two pay scales. The contract also wouldn’t cap the number of Tier 2 workers hired by the automaker.

The union will take the proposed contract — which was negotiated with FCA only hours before a proposed strike — to its workers on Friday.

“We heard from our members, and went back to FCA to strengthen their contract,” UAW President Dennis Williams told employees Thursday. “We have made real gains and I look forward to a full discussion of the terms with our membership.”

Senior employees would get the same raises proposed in the rejected contract.

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19 of 35 comments
  • Brn Brn on Oct 08, 2015

    Let's be sure to put the hate on anyone wanting to earn a decent wage, doing a shitty job, in freaking 2015.

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    • Brenschluss Brenschluss on Oct 10, 2015

      @brn Earnestly, I would be interested to know what is expected of an upper-tier UAW member employed at an American automotive factory. This might be interesting to explore for people who don't know any better, like myself. It's easy to talk shit, but I have no idea what one is told once clocked in at one of these factories.

  • Xeranar Xeranar on Oct 08, 2015

    So many fancy armchair analysts getting uppity over a $160 a week raise... Who knew $8,320 a year raise would make people lose their minds. I mean selling nearly 2 million vehicles annually in the US and nearly 116 billion in net revenue...Clearly they better be running to stop the checks or they'll be out of business tomorrow! Anyhoo....The plants aren't closing anytime soon. Sergio knows that Mexican wages are rising faster than most plants in SE Asia and while they don't parallel the US' yet they will sooner many will think.

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    • Tonycd Tonycd on Oct 09, 2015

      @BklynPete Tiered pay is cancerous to a workplace's morale. Shame on the unions for allowing it in the first place. They sold out their younger peers to temporarily protect pay and benefits for themselves. And in so doing, they destroyed the united front that workers must present in order to retain a measure of power over their own livelihoods.

  • Lorenzo Lorenzo on Oct 09, 2015

    The tier 2 workers will get raises over eights years? The contract isn't that long, and FCA's tier 2 workers aren't going to wait that long. It looks like the UAW is in the impossible position of trying to satisfy its members while knowing that their employer is on the rocks and won't survive the contract they want. FCA will have to merge with a bigger company, be broken up through spin-offs, or be parceled off in bankruptcy. It doesn't have the income to pay higher salaries and service its massive debt from old Fiat. The workers need to be told how shaky their job security is, but that would undermine Sergio's effort to find a buyer.

    • Mopar4wd Mopar4wd on Oct 09, 2015

      In the US they are doing very well and from what I just looked up in their earnings report Europe has somewhat stabilized in the last 2 quarters for them and is no longer bleeding cash. The current drag on profits is paying for previous losses in Europe and a sudden collapse of sales in south american over the past 6 months. So globally Fiat can't afford it In the US however they can, at least that would be my argument if I worked there, "my division is doing great I need a raise".

  • Seanx37 Seanx37 on Oct 09, 2015

    Does FCA really have the money for this? Or in reality, they are just kicking the can ? Knowing that they most likely will be sold, or dismembered long before such wages take effect?

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    • Seanx37 Seanx37 on Oct 09, 2015

      @BklynPete That is basically what I thought. The huge debt,and servicing of it is a big issue. And the fact that FCA had to delay updates due to lack of money is going to be a huge problem now that all the competition has either updated, or will update all competing products by the time FCA gets around to it.