The UAW and Fiat Chrysler Automobiles announced Tuesday evening the two parties have reached a tentative agreement for new contracts that were set to expire Monday at midnight
DETROIT, MI - The UAW and Fiat Chrysler Automobiles announced Tuesday evening the two parties have reached a tentative agreement for new contracts that were set to expire Monday at midnight.
FCA, which is the Detroit Three automaker selected to lead the contract talks, and the UAW had extended talks on an hourly basis after the deadline had passed.
FCA chief executive Sergio Marchionne and UAW president Dennis Williams were set to discuss the agreement with the media Tuesday night in Detroit.
Going into the talks, which officially began in July, the stated goal of the UAW was to bridge an apparent wage gap between so-called Tier 1 and Tier 2 workers.
The two-tier wage system was set up to boost hiring of entry-level workers in the late 2000s when automakers were struggling. Tier-2 entry-level workers are compensated at nearly half the hourly rate of so-called Tier-1 legacy workers who were hired before 2007.
Of the Detroit Three, FCA easily has the largest share of tier-2 workers. They account for 45 percent of the hourly labor force at FCA, compared with 28 percent at Ford Motor Co. and 20 percent at General Motors, according to Automotive News.
At the same time, the American automakers have been trying to keep wages more in line with several of the foreign counterparts.
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.
Those averages are $49 at Honda, $48 at Toyota, $42 at Nissan, $41 at Hyundai, $39 at BMW and $38 at Volkswagen. Mercedes-Benz has the highest rate at $65.
Details of the agreement between the FCA and the UAW were not immediately released early Thursday evening. But the details between those two parties will set the tone for contracts between the UAW and GM and Ford.