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UAW contract in trouble

by Bill Cawthon on

Despite assurances of ratification from UAW president Dennis Williams, the proposed contract between Fiat Chrysler and the union is currently on a path to rejection.

According to a report in the Detroit News, UAW members at the Toledo Machining plant and the Trenton Engine Complex joined their counterparts at the Kokomo Casting and Sterling Stamping plants in voting “No” on the agreement. Late reports from Local 685 in Kokomo indicate the deal has been defeated there, as well.

There have been conflicting reports of the results from the Dundee Engine Plant, the most recent saying the contract had been approved.

UAW-Vote-Reject

The opposing margins have been very high; an estimated 80% of workers the Trenton plant turned down the deal.

Several large plants won’t vote until next week including Belvidere Assembly, Sterling Heights Assembly, the Toledo Assembly Complex and the Warren Truck plant. However, a ratification vote from these plants is far from assured; Belvidere voted down the 2011 agreement.

A hot button is the 25% cap on the number of Tier 2 employees. It’s not even mentioned in the new contract. UAW Chrysler Vice President Norwood Jewell explained the omission, saying he could find no mention of the cap in the 2011 agreement. That’s because the cap was spelled out in the April 2009 addendum to the 2007 contract.

In the addendum, the 25% cap is spelled out: “There shall be no cap on the number of Entry Level employees hired through September 14, 2015. As of September 14,2015, the number of Entry Level employees shall be capped as the lesser of 25% or the ex­isting Entry Level percentage; and those Entry Level employees by seniority above the cap, if any, shall be transitioned to Tra­ditional Employee status.”

Another issue is the raises themselves. While Tier 2 hourly workers get a decent increase, the increase for Tier 1 is thousands of dollars per year shy of the inflation-adjusted value of the wage agreed to in 2007. Furthermore, Tier 2 salaried workers in most pay grades will still see significant gaps between their pay and that of Tier 1 salaried workers. Only the top four grades will see their maximum pay increase to the equivalent of a senior UAW salaried member’s pay. The base pay for all salaried grades remains the same through the entire four years of the new contract.

There is also concern about the proposed health care co-op. The new contract doesn’t spell out the details of such a new program but it’s impossible to be specific until it’s known if Ford and General Motors will participate.

The production changes are also being questioned. Moving car production to Mexico and truck production to the U.S. carries some risks. When the market tanked, car sales dropped about 28% from 2007 to 2009 but truck sales nosedived more than 50%. Changes in oil prices, 2025 EPA fuel economy standards, and the likelihood for a correction in the light vehicle sales mean the changes might not be in the best interests of U.S. workers.

If the contract is rejected, the UAW still has choices: it can call a strike, which has already been authorized; it can extend the current contract and go back to the table; or it can put a Fiat Chrysler deal on hold and shift its focus to either Ford or General Motors. The union would then come back with the deal it struck with one of them.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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