Posted on 09/14/2015 2:09:48 AM PDT by equaviator
The United Auto Workers union will accelerate its bargaining efforts with Fiat Chrysler Automobile in the hopes of hammering out a template for a new labor contract the other two Detroit auto makers will match.
The choice of Fiat Chrysler's FCA US unit as the target company for shaping the new contract, disclosed by the union on Sunday, kicks off an intense negotiating period expected in part to focus on a two-tier wage system that has financially benefited auto makers but rankled workers.
The UAW's current contract with Fiat Chrysler, General Motors and Ford Motor expires on Monday, but labor talks between the union and Detroit's auto makers routinely extend beyond that deadline.
"All three companies are working hard toward a collective bargaining agreement," UAW President Dennis Williams said in a statement. "All three companies have been working with UAW bargaining teams toward a collective bargaining agreement and continue to do so."
A UAW spokesman declined to comment further.
Mr. Williams and other union leaders want wage increases for the UAW's roughly 140,000 rank-and-file members at Detroit's three auto makers. Most haven't received base pay raises in a decade. Specifically, they want to eliminate a controversial two-tier wage system that pays newer factory hires about $9 an hour less than veteran employees for doing the same assembly-line work. Fiat Chrysler Chief Executive Sergio Marchionne has publicly called for ending the pay structure.
That quirk came about in 2007, when auto makers were on shakier ground. The financial crisis forced GM and Chrysler to undergo government-brokered restructurings in 2009, a fate that Ford avoided by taking on massive debt a few years earlier. Union leadership has signaled the next deal shouldn't be one for givebacks amid a booming U.S. auto-sales landscape on track to be the best since 2001 that is bolstering finances at GM, Ford and Fiat Chrysler.
Fiat Chrysler is the smallest and least profitable of the Detroit car makers and has the highest percentage of lower paid workers, which has given it a $9 to $10 wage advantage over GM and Ford. About 45% of Fiat Chrysler's workers are new hires being paid the lower wage. GM and Ford capped their new hires at 25%.
Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research, said the Fiat Chrysler pick indicates the union recognizes the auto maker is in a different business position than Ford and GM.
"It is a game theory of ratification," she said. "If you go to Fiat Chrysler first, you can get a pattern GM and Ford aren't going to choke on."
The UAW has made preparations to strike, as it often does, if negotiations break down.
The car companies, meanwhile, will be pushing to keep labor costs in check, hoping to avoid additional fixed expenses that could become a drag on earnings during a downturn.
Mr. Williams and Mr. Marchionne hugged at the ceremonial handshake in July officially kicking off labor negotiations.
Both have been vocal on not only restructuring pay but also dealing with how the auto makers buy health care for their workers. The UAW is looking to restructure the way the Detroit car makers purchase health care in an effort to generate savings and help members avoid higher out-of-pocket costs.
Bargainers at GM, Ford and Fiat Chrysler have said health-care costs have been rising at an unsustainable rate and could climb even higher with a new federal tax going into effect in 2018. Combined, the three car makers will spend more than $2 billion on health care this year for union-represented workers.
The Detroit three have for decades faced higher labor costs compared with foreign rivals, but concessionary deals made in prior negotiations have helped level the playing field.
In the past, the union would often pick a so-called "strike target" to negotiate with first, and then picket the company if a deal couldn't be reached. More recently, the union has opted to bargain simultaneously with all three and then choose one to lead.
Union members last year voted to raise membership dues to expand its $600 million strike fund, and in August, UAW locals across the country held strike authorization votes, receiving overwhelming approval for a work stoppage if talks were to break down.
GM and Fiat Chrysler workers also will have the right to strike for the first time since 2007. A no-strike clause adopted as part of bankruptcy agreements barred workers from one during talks in 2011.
Mr. Williams, however, has said he views a strike as a last resort and a failure on both the union and companies' part.
Fiat's Mr. Marchionne is a formidable negotiator and has in the past gotten directly involved in talks, sitting right at the bargaining table. Often, chief executives leave it up to the company's bargainers to work out details. Mr. Marchionne has yet to change his current plans, which has him appearing at the automotive show in Frankfurt next week.
Here we go again...
“Both have been vocal on not only restructuring pay but also dealing with how the auto makers buy health care for their workers. The UAW is looking to restructure the way the Detroit car makers purchase health care in an effort to generate savings and help members avoid higher out-of-pocket costs.”
Unions are exempt from Obamacare.
Heck no, their plans are so good they will fall under the "Cadillac Tax" and WJR (and others) is reporting a "cooperative" medical plan for GM, F-C, & Ford to cut cost, or so they say. I wonder if it their attempt to put a smiley face on what Obamacare will do to their workers in 2016...
http://www.reuters.com/article/2015/09/03/us-autos-uaw-idUSKCN0R32J720150903
If memory serves, Michigan is now a right to work state. That didn’t affect current contracts, but would affect this one.
http://www.usatoday.com/story/money/cars/2015/08/19/cadillac-health-insurance-tax/32029209/
So they are targeting the least profitable company
What if Fiat says “Vaffanculo” and moves all of it’s production to Italy and Bulgaria?
If one of the US big Three goes down because of the UAW that might get the others to break the union
I think the Chrysler Dodge brand is in pretty good shape. It isn’t structured to generate the profits of GM or Ford. I don’t think it ever was. It’s pretty streamlined IIRC.
Hahahaha... wait a minute. Aren’t the UAW part owners of Chrysler? They’re threatening to strink against themselves?
Walker, has come forth and said that all federal unions need to be disbanded. I agree with that, and I hope Trump does too.
Obama’s HHS will give them a waiver as usual. Then another bailout for their pension fund.
Obamacare is only for us taxpaying peons.
Mr. niteowl77
Specifically, they want to eliminate a controversial two-tier wage system that pays newer factory hires about $9 an hour less than veteran employees for doing the same assembly-line work. Fiat Chrysler Chief Executive Sergio Marchionne has publicly called for ending the pay structure... Bargainers at GM, Ford and Fiat Chrysler have said health-care costs have been rising at an unsustainable rate and could climb even higher with a new federal tax going into effect in 2018... Marchionne is a formidable negotiator and has in the past gotten directly involved in talks, sitting right at the bargaining table. Often, chief executives leave it up to the company's bargainers to work out details. Mr. Marchionne has yet to change his current plans, which has him appearing at the automotive show in Frankfurt next week.It'll be interesting if the "pattern contract" is arrived at with Fiat Chrysler.
“Don’t touch my Dart”
Don’t worry, I won’t!
WJR also reports that contract extensions are possible.
“Aren’t the UAW part owners of Chrysler?”
Maybe some of their hourly workers in the plants believe that to be the case and that the UAW owns the majority of F-C.
Union members last year voted to raise membership dues to expand its $600 million strike fund
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Shrinking. I remember when the fund was a billion.
Good!
I want to see it down to nine dollars.
“The UAW is looking to restructure the way the Detroit car makers purchase health care in an effort to generate savings and help members avoid higher out-of-pocket costs. “
Good luck with that and the Obamacare tax coming down the road.
This is simple, and ironically Obama might give them a waiver or ask Congress to do it.
And that is make Direct Primary Care Services payable with Flexible Spending Account and or Health Savings Account Dollars of which they cannot do.
That one change alone would negate Obamacare...
Notice the Direct Primary Care Act S 1989 on the right hand of the website...
Now that hurts!
Really, it’s a nice car, and it goes VROOOM VROOOM!!!
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