The two-tier pay system at Fiat Chrysler Automobiles might be changed with a tentative labor contract that would cover 40, 000 workers in the U.S., giving a new approach for medical costs, as the company’s CEO, Sergio Marchionne, announced on Tuesday.
Marchionne explained that the current system will cease to exist in time. The old contract said that hired union workers receive $19.28 per hour, while veterans cashed in $28 an hour. While the new rates decided by FCA have not been revealed yet, the analysts expect that both payments to be leveled out.
The head of FCA also said that the proposed contract will include methods that curb the high healthcare costs and the idea of pooling health plans for FCA, General Motors Co. and Ford Motor Co. More information on this topic was not given by Marchionne or UAW President, Dennis Wiliams. The endorsement of the pact bears important significance as the leaders of UAW are looking to get ratification from UAW-FCA employees.
Kristin Dziczek, labor analyst at the Center for Automotive Research said that “Expectations are very high for raises for everyone.” She added that she expected the agreement to offer salary raises for new workers somewhere in the mid $20 range and add a 50 cent per hour raise for veteran workers.
At the moment, at FCA around 45% UAW workers receive lower-tier wages. By winning salary raises, UAW would witness a revival of its efforts to organize non-union car factories in the south of the U.S. and why not, encourage workers in other industries to act on their rights.