Chief Executive Sergio Marchionne announced that it’s Fiat Chrysler Automobiles intention to start phasing out the two-tier wage scheme used for US workers.
In the current strategy, the two level wage scheme sees veterans earn money from a higher base than new US automotive workers, but the FCA CEO plans to unify the wage system by eliminating the top tier as veterans retire from work and only new hires are added.
“The way you do this is you grandfather the Tier 1s,” Marchionne said of the veteran workers. “You make them a dying class and you build a Tier 2 structure that sets the wage mechanism for the next generation. “When you have a bumper year, you pay the latter as much as a Tier 1 would make if not more. But if I’m in the toilet because the markets are down or GM is successful, or Ford, and then we go down in earnings, then I think at the end of the day you share the pain with the company.”
Marchionne added that he would like to open wage talks with Dennis Williams, the next UAW leader as early as this year, even though Chrysler and its main rivals GM and Ford only have to discuss salaries with the United Auto Workers union in 2015.