Approval of the Fiat Chrysler contract influences negotiations with Ford and GM

The results are in and members of the United Auto Workers Union (UAW) have voted to pass a labor agreement with Fiat Chrysler.  On October 20, 2015 and October 21, 2015, 40,000 workers voted on the second contract between Fiat Chrysler and the UAW. The first was rejected by 65 percent of union members.

The UAW’s years of propaganda against automakers and lack of communication about the first contract with members, caused its rejection. Now 77 percent of UAW members have chosen to accept the second agreement.  

After the auto industry bailout a two-tier wage system was established. Employees hired before 2007 were first-tier and made more money than people hired after 2007, who are considered second-tier.  

The major problem with the first contract was there was no clear way for second-tier employees to move into the first tier.

In the new contract, second-tier employees' salaries will increase $10 and they will receive a $3,000 signing bonus. First-tier employees will have 3-4 percent raises each year and be paid a $4,000 signing bonus. 

The gains made in the second contract with Fiat Chrysler caused UAW President Dennis Williams to claim this agreement was the “richest ever negotiated.”

The UAW is happy with the contract and chose Fiat Chrysler to be the first of the big three automakers they negotiate with, moving onto Ford and General Motors (GM) in the following weeks.

The high percentage of approval of the second contract by union members has raised the bar for the negotiations with GM and Ford. Christina Rogers at the Wall Street Journal noted, “UAW officials intend to use the Fiat Chrysler agreement as a template for talks at Ford and GM, although Mr. Williams has said deals struck at the two more-profitable companies will reflect their stronger financial standings.” In other words, the UAW wants and expects more from the GM and Ford contracts.

The UAW needs to be careful not to promise its members things it can’t deliver.

UAW President Dennis Williams promised members he was attacking the two-tier wage system. But the first Fiat Chrysler contract failed because little was done to close the gap between tiered workers. This was the UAW’s first rejected contract in 30 years.

The second Fiat Chrysler contract's approval gives the union confidence it can get more from GM and Ford. But the UAW should be careful of the promises it makes to members, because GM and Ford will not be as accommodating as UAW President Dennis Williams wants. And this country and the workers can’t afford for negotiations to fail.

The UAW wants and expects a lot more from GM and Ford, but we all want things that don't happen.