The UAW selected FCA US as its initial target for pattern bargaining with the Detroit 3. The union’s 2011 contracts with Ford Motor Co. and General Motors were extended as talks proceeded with FCA.
Had a deal not been reached and a strike called, it would have been the first time the UAW has struck a Detroit 3 automaker over wages and benefits during national negotiations since brief walkouts, first at General Motors, then at Chrysler, in the fall of 2007.
Under Chrysler and GM’s U.S. government bailouts in 2009, the union was prohibited from striking the two companies during the 2011 round of labor talks.
In rejecting the Sept. 15 tentative agreement with FCA, UAW members said on social media that the main issues were continuation of the controversial two-tier wage system, displeasure over alternative work schedules and job security matters.
It was unclear what changes were made by bargainers to achieve a new agreement.
FCA is in the worst financial shape of the three Detroit automakers and least able to afford significant increases in labor costs or an extended strike. FCA would lose roughly $1 billion in revenue and an estimated $40 million in operating profit per week in a general strike, according to auto analysts quoted by Reuters.
UAW members would have been asked to make tremendous financial sacrifices as well during an extended strike. Strike pay is $40 per day, or $200 per week, but doesn’t start until the eighth day of a strike.
The rejected tentative agreement would have provided raises to both higher-paid legacy workers and lower-paid Tier 2 workers. Legacy workers, who comprise 55 percent of FCA’s hourly workforce would have seen their wages rise from $28 an hour to $30 an hour. Tier 2 workers would have progressed from $16 to $19 an hour to $17 to $25 an hour.