Fiat Chrysler UAW Workers' Rejection Sends Leaders Back to Table

  • Deal called for raises for all UAW members, narrower wage gap
  • Workers seen as wary on health-care plan, wanting tiers ended

United Auto Workers members at Fiat Chrysler Automobiles NV voted about 65 percent against a proposed contract that called for raises for all the employees and narrowed the pay gap for second-tier workers, sending union leaders back to negotiations with potentially less clout.

The union will notify the company that “further discussions are needed,” UAW President Dennis Williams said Thursday in an e-mailed statement, without giving a timetable. Fiat Chrysler said it was disappointed but “looks forward” to a continued dialogue.

“We don’t consider this a setback,” Williams said in the statement. “We consider the membership vote a part of the process we respect.”

The rejection stalls Williams’s efforts to move on to winning tentative contracts with General Motors Co. and Ford Motor Co. Williams, who wanted the ratification by Sept. 28, sought to use the deal reached Sept. 16 with Fiat Chrysler’s Sergio Marchionne to negotiate similar but more lucrative pacts from the other two companies. The UAW represents about 40,000 Fiat Chrysler workers.

“I don’t see how this ends well for Fiat,” Art Wheaton, a professor of labor at Cornell University, said in an interview. “They may end up with a strike and I don’t think the UAW is going to win. I think the leadership knows that but they’re stuck. They can’t do what the membership won’t ratify.”

Workers wanted the tier system eliminated, more information about a new health-care cooperative and clarity about the company’s investment plans, Wheaton said.

‘Reasonable Agreement’

Rejection of the contract strengthens Fiat’s hand and hurts the union members bargaining position, he said.

“The contract lacked details, but it was a reasonable agreement,” he said.

The Fiat Chrysler agreement would have boosted hourly base wages over the contract term to $29.76 at the senior tier and as much as $25.35 for the second tier, according to the UAW. The ratification bonus would have been $3,000. The automaker also had pledged to invest as much as $5.3 billion in the U.S.

The automaker, formed out of Chrysler’s 2009 bankruptcy, said in a statement that “the cyclical nature of the automotive business demands that while we must recognize the need for rewarding employees during times of prosperity, we must also protect against the inevitable market downturn. This agreement accomplished both of these objectives.”

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