Report – New FCA-UAW deal to gradually close the second tier image

The new tentative agreement between Fiat Chrysler Automobiles NV’s US unit and the UAW union would see a gradual elimination of the long-contested two-tier salary structure, claim sources.

According to the sources that have reported under the cover of anonymity to Reuters, the much detested two-tier ranking system would be completely phased out within the span of two contracts – eight years. The deal was agreed between FCA executives and UAW union negotiators late Wednesday as the strike threat by the 40, 000 strong workforce loomed. The sources further added the top salary for certain second tier workers would jump to $29 per hour during the span of the current contract, jumping from their current tally of $19 per hour. That would be more than the $25 top pay for second-tier workers that was agreed upon in the deal reached last month that was soundly rejected by 65 percent of rank and file UAW members.

The failure of the first tentative deal resulted in the threat of strike by the UAW against the third largest Detroit carmaker, which should have started Wednesday at one minute before midnight eastern time – the first walk out at any US carmaker since 2007. Now there hasn’t been imposed a cap on second tier workers as part of the new arrangement, with analysts contending that would have made the tier more permanent. The report also didn’t mention if the company shelled out more money or simply reshaped the initial monetary agreement. The top tier pay increase proposal remained the same – 3 percent raise in year one, 3 and 4 percent lump sum pays in years two and four.

Via Reuters