Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles (FCA) NV and the architect behind Fiat SpA’s acquisition of the third largest US automaker Chrysler and subsequent merger, believes the current two-tiered payment for hourly autoworkers should be axed.
Marchionne believes the structure in place today – a higher hourly salary for experienced workers and way lower pays for entry-level hires – should be completely changed in favor of a new system. That would bring a lower base salary for everyone for equity and in compensation the automaker would pay larger bonuses directly linked to the company’s earnings. Agreed by the United Auto Workers union back in 2007, the system has starting employees receiving 50% of the full wage of $28 an hour – today that former payment has gone up to around $18 an hour, while pay for experienced workers has remained the same. The top ranking executive favors axing the system and giving everyone the lower base wage, with a higher performance bonus that would level the playing field between the two type of workers. “There can’t be two classes for people who do the same work,” Marchionne told reporters during the NAIAS motor show. “It’s impossible. It’s almost offensive.”
Last month, newly appointed UAW President Dennis Williams said the union will ask for higher payments for the workers when they meet with the Detroit automakers’ representatives later on this year as they need to negotiate a new four-year labor agreement with auto industry executives.