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Revisiting the two FCA contract proposals

by David Zatz on

It’s been several days since details of the UAW contract proposals were shown to the public, and so far, the response has generally been negative. Most missives from union members have called it the bad deal, while members of the general public have varied from thinking it was too generous to too stingy, but generally not falling into the middle ground of fairness.

UAW and FCAThe UAW is unlikely to use the same terms for GM and Ford, and appear to be trading FCA’s promise of job retention and/or more jobs in the United States for raises that beat cost of living increases — not an advisable deal with most leaders, but Sergio Marchionne has tended to live up to his promises of jobs, and has already dramatically increased American employment, partly by taking jobs away from offshore suppliers (particularly in China and Mexico). At the same time, he has increased manufacturing jobs in Mexico and invested heavily in Canada, in the form of the Windsor, Ontario plant.

Without further ado, here is a brief summary of the two agreements. First, common to both, FCA agreed not to merge with any other company that does not honor the agreement. That is not an issue if FCA were to take over or merge with GM or Ford, but certainly would be if they joined with, say, China’s SAIC or Germany’s Volkswagen (neither scenario is at all likely). In addition, there are no plans to idle any plants over the next four years, other than to renovate and transform them, and FCA agreed to meet with the UAW before work schedules are changed to review options.

For all workers:

  • “Eligible” members would get a bonus of $3,000 for signing the contract
  • Senior workers would get two 3% raises and two 4% lump-sums
  • Wage increases for junior workers based on seniority
  • Bonuses would be between $4,000 and $13,000 with better profit-sharing for everyone, especially junior (“Tier 2”) employees (the bonuses are tied to quality and productivity metrics and are not guaranteed. The metrics are decided on by FCA.)
  • A new health care cooperative, the UAW’s idea, would maintain benefits while “controlling costs” for the company
  • Vacations could be used in one-day increments
  • Restoration of 64 paid holidays over four years including Easter Monday
  • A new legal services plan
  • Changes to the hated rotating shift scheme including overtime pay and not having to work successive weekends

For salaried workers:

  • Extra gains for nurses, and “further education” for designers
  • Improvements in the discipline process
  • Lump sums in the second and fourth year total around $5,000 for Tier 1 workers

For hourly workers:

  • Junior workers would get a gradual raise in their peak salary to $25.35 per hour, with at least $25,000 more over four years (including lump sums); senior workers would get at least $19,000 more over four years (including lump sums)

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