The tentative agreement between the United Auto Workers union and Fiat Chrysler Automotive seems to be in jeopardy.
Union leaders are not giving up yet, but it looks like they'll have to do a major sell job to win ratification of the new contract. Four big Fiat Chrysler locals vote on the contract early this week and their votes are likely to determine the fate of the deal.
On Sunday, members of UAW Local 7 at the Jefferson North plant in Detroit voted against the contract by a significant margin, according to the Detroit News. It said 66 percent of production workers, and
That comes on top of a series of defeats at Chrysler plants across the Midwest, including UAW Locals 685 and 1166 in in Kokomo, Ind., UAW Local 372 in Trenton, Mich.,UAW Local 1435 in Perrysburg, Ohio, UAW Local 1264 in Sterling Heights, Mich., and UAW Local 1248 in Center Line, Mich., according to the Detroit Free Press.
A UAW vice president, Norwood Jewell, said Sunday it's still "mathematically possible" for the contract to be approved, according to the News. The four big plants voting on the pact Monday and Tuesday are the assembly complexes in Warren and Sterling Heights, Mich., Toledo, Ohio and Belvidere, Ill.
Workers are upset about several aspects of the new contract.
Two-tier wages. According to a work sheet explaining the previous contract, approved in 2011, the UAW and Fiat Chrysler agreed that only 25 percent of the workforce would receive lower wages, under a two-tier formula that pays newer workers $19.28 an hour.
Once that cap was reached, everyone else would have received the $28 pay rate that veteran workers are paid, according to the worksheet. The cap also was mentioned in a worksheet for the 2007 contract, leading workers to believe that it existed.
It turns out the cap wasn't in the negotiated language for the 2011 contract, and about 45 percent of Fiat Chrysler workers now are paid the lower rate.
Some workers perceive that as a "broken promise" on the part of the union and management. Union leaders say it is simply a misunderstanding, although one that has gone on for eight years.
Under the tentative agreement, lower-paid workers are set to get a wage boost to $25.35 an hour. They still would not reach the full wage rate paid senior workers, however.
That contrasts to auto workers in Canada, whose union negotiated a "grow in" provision in their last contract, although it will take them until 2022 to reach parity. There is no such provision in the tentative UAW pact.
Health care co-op. The tentative agreement calls for the Detroit automakers to start work on forming a health care co-operative, which could administer plans and negotiate rates for UAW members across the companies. Currently, each automaker is in charge of its own plan.
Workers told the Detroit newspapers that they don't have enough information about the new co-op, and are reluctant to give the automaker permission to pursue it without knowing how their coverage would be affected.
Product plans. Everybody at Fiat Chrysler wants to know which vehicles Fiat plans to build, and where it will build them. There have been reports that vehicles made in Sterling Heights and Belvidere will be moved to Mexico. Other reports say truck production to shift to Belvidere, which makes cars.
Fiat officials haven't announced investment plans, possibly because they simply don't know which mix of vehicles they will be building in the next few years. Often, company officials use a new contract as a way to confirm product plans, which is why the lack of information has made workers uneasy.
If the UAW members reject the Fiat Chrysler contract, the union has a couple of choices. It can go back to Fiat Chrysler and re-negotiate a pact that it believes would be more palatable to workers. The UAW may set a strike deadline in order to stress the urgency of the situation.
The union also could put talks at Fiat Chrysler on hold, extend the current agreement, and proceed with negotiations at
Rejection of a contract is not unprecedented. In 1982, Chrysler workers rejected a deal that would have given them profit sharing payments rather than raises. They had given $2 an hour concessions to keep Chrysler afloat, and wanted the cash instead of the checks.
It is rare for workers to reject what is meant to be the pattern agreement for the rest of the industry, however. And, no union, or company leader for that matter, likes to see a contract turned down. That negates months of hard work by negotiators, and also is a public rebuke of the union's leadership for misreading the sentiment of the workforce.
This is the first national contract negotiated by new UAW President Dennis Williams, who was elected last year. So, the outcome will be a test of his ability, and that of his leadership team, to sway his workforce - if they think this pact can be saved.
When the tentative agreement was announced, Williams and Fiat Chrysler CEO Sergio Marchionne each voiced optimism that a new era was beginning in Detroit labor relations. However, their workers may not be ready yet to endorse that idea without some clearer answers.
