UAW Rallying Support for Fiat Chrysler Contract with Promise of Higher Wages -- Update

By Jeff Bennett and Christina Rogers 

The United Auto Workers union will use the promise of higher wages for entry-level workers and more clarity on future vehicle production to rally skeptical rank-and-file members to support a richer contract with Fiat Chrysler Automobiles NV after rebuffing the auto maker last week.

New hires will be offered a wage of $29 an hour, which will be achieved gradually over an eight-year span under a new tentative agreement hammered out late Wednesday night, according to two people familiar with the changes. That is 16% higher than the $25 an hour offered in a proposed contract that was soundly rejected by 40,000 members last week, and it is about equal to the rate being offered to workers with higher seniority.

About 45% of Fiat Chrysler's workers are considered entry-level, much higher than the mix at Detroit rivals Ford Motor Co. and General Motors Co.

The $29 rate is 53% higher than the roughly $19 an hour that entry-level workers currently make. The higher promised wage, coming after tense negotiations and the UAW's threat of a strike, is a win for a union that has been forced to make big concessions on health care, wages and other compensation over the past decade.

The new rate was earlier reported by Bloomberg.

The deal sets a steep precedent for GM and Ford to follow. Because Fiat Chrysler has more entry-level workers, its hourly labor costs are on average $10 an hour lower than other Detroit auto makers.

GM and Ford, with among the highest compensation costs of auto companies assembling cars in the U.S., are reluctant to approve a dramatic increase to their comprehensive compensations.

As part of the agreement, Fiat Chrysler has offered the UAW a more detailed rundown of which plants will get new models and the jobs associated with that work.

The company committed $5.3 billion in new investment under the previous deal but a summary presented to workers didn't detail where the money would be allocated or whether it would lead to new work, causing many workers to fret about job security.

UAW President Dennis Williams will meet with hundreds of local leaders Friday in Detroit to review details of the tentative agreement. The local leaders have to approve the contract before returning to their plants for membership voting.

UAW didn't immediately respond to a request for comment.

Write to Jeff Bennett at [e-mail] and Christina Rogers at [e-mail]

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(END) Dow Jones Newswires

October 08, 2015 15:44 ET (19:44 GMT)

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