The deal with FCA came after a furious 48 hours of bargaining that included an all-night session from Monday to Tuesday.
Marchionne is calling for an amicable conclusion to the current wage system.
Although neither side elaborated on the agreement late Tuesday, UAW President Dennis Williams referred to the proposed contract as “balanced” and it keeps both the union and the corporation competitive. Social media chatter so far has ranged from “Let’s walk, this isn’t almost enough” to “there are people who would kill for those jobs”.
Proponents of organized labor also hope that the success of UAW talks in Detroit will embolden workers in other industries where pay has stagnated in the face of economic uncertainty and global competition.
“Our value, if we have any to society …is that we act as incredibly effective safety valves”, Marchionne said.
In the dark days of 2007, the union agreed to the two-tier system, with less-expensive benefits and lower pay, to try to end losses at the Detroit Three.
John Beck, associate professor in Michigan State University’s school of human resources and labor relations, told the Detroit News that the biggest challenge will be getting the rank and file to ratify a deal.
Adding to the challenge is selling an agreement when all three automakers are making so much money in the USA that it helps mask their chronic losses in Europe, a deepening recession in Brazil and now a slowdown in China. Consider what Williams confronted.
But, FCA US CEO Sergio Marchionne has distinguished himself from his Ford and GM counterparts, in part, by consistently denouncing two-tier wages.
Analysis from the Center for Automotive Research in Ann Arbor shows that blended average hourly labor costs, which include direct and temporary employees, at GM are $58, at Ford they’re $57, and at FCA they’re $48.
The union leadership has the authorization of its members to call a strike should the talks with FCA fall apart. Between them, they pay over $2 billion a year to fund health insurance for active workers and blue-collar retirees.
Since this contract sets the pace for union negotiations with GM and Ford, Economist Patrick Anderson says avoiding strikes in those deals are key.
Contact Alisa Priddle: 313-222-5394 or [email protected]
What’s next in UAW contract talks?
The 4-year tentative agreement will be reviewed tomorrow by the UAW executive board.
UAW President Dennis Williams said that’s because union members deserve to see the new deal first.
Details of the agreement will be presented leaders of UAW local unions from FCA’s US plants.
The union represents 140,000 hourly workers at Fiat Chrysler, General Motors and Ford Motor. The UAW had officially initiated contract negotiations with General Motors Company(NYSE:GM) back in July this year. Solving that with the automaker is likely to give the UAW greater leverage in its bargaining with Ford and GM, which are in a better financial position than Marchionne’s company.