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See what’s in the new UAW-FCA contract

by David Zatz on

The Detroit News has released its exclusive summary of the contents of the proposed new contract between the FCA and the UAW, which will be seen by local union leaders today. If the leaders do not object, it will be turned over to the rank and file.

In brief, the two-tier system (where more senior employees have much higher pay) will continue, but those who have less pay (the junior tier) will see lower health care costs and an easier path to the senior tier.

In essence, the senior employees’ health insurance coverage would be provided to the lower-tier full-time employees as well; even temporary employees would get prescription drug coverage. Health insurance is a major benefit for union employees at all three major U.S. automakers.

As part of the pattern bargaining, FCA removed its cap on profit-sharing, matching GM’s 2019 concession (Ford had already removed its cap). The formula will increase from $800 to $900 per point of the North American profit margin (e.g. if the profit margin was 4%, profit-sharing would rise from $3,200 to $3,600 per employee).

Belvidere's Millionth

In accordance with the 2019 pattern, there are also $1,000-per-person contributions to retirement plans for nontemporary workers, and dual thousand-dollar tool allowances for skilled trades workers. Those with over 12 years of experience at the Mount Elliott Tool & Die plant, Marysville Axle, Belvidere Assembly (former home of the Neon and Compass/Patriot), and a Mopar warehouse are being offered a $60,000 retirement package.


FCA will maintain the two-tier (junior/senior) system, which gives it a labor-cost advantage over GM; but today’s most senior “junior tier” employees will be in the senior tier within four years, while temporary employees will have a way to reach full-time status as well as priority in any full-time hiring. Since the lower tier is a relatively large proportion of workers at FCA, this is a serious concession.

FCA also agreed to a cap on temporary employees, to be calculated quarterly, and without limits on weekends, Mondays, Fridays, and holidays. This is not likely to be a major issue given projections for 2020 car sales, and does not affect Canadian plants.

There are also relatively minor pay increases, with workers getting a 3% increase in two years of the agreement, and skilled or most-senior employees also getting 4% bonuses in the other two years. Temporary workers hired before 2007 will get the same wage increases, with temps hired in the last four years getting an unspecified gain. Regular employees will get $9,000 signing bonuses, with temporary workers getting $3,500 each, which matches Ford but falls far short of GM. The main reason is likely that GM was closing plants, while FCA is building new ones.

warren stamping plant-sign

FCA has committed to 1,400 new jobs and $4.5 billion in investments, above and beyond its recent Mack Avenue plant (which is to create over 6,000 new jobs). Indiana Transmission will get nearly a half-billion dollars and over 1,000 employees, possibly due to higher production of hybrid powertrains. The Sterling Heights and Warren stamping plants, which border Van Dyke in a direct line to Detroit, will get another half-billion dollars, and Michigan, Dundee, and Trenton will get relatively minor investments.

Detroit News pointed out that Ford agreed to over $6 billion to create or retain 8,500 jobs, but is closing one plant; GM is investing even more, to “create or retain” 9,000 jobs, but is closing three transmission plants and selling Lordstown Assembly. FCA is not expected to close any assembly or components plants in the near term.

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