FCA Contract Bright Spot for Embattled UAW

Besides the new pacts with General Motors, Ford and now Fiat Chrysler Automobiles, the UAW also has a new president and new internal rules while reclaiming some of the militancy that made it so feared in the 1960s and ’70s.

Joseph Szczesny

December 16, 2019

4 Min Read
GM Strike-Flint Assembly-9-16-19 (Getty)
UAW members picket outside GM’s Flint Assembly Plant at onset of strike.Getty Images

The UAW completes its quest for new contracts with Detroit’s automakers as a different union than when it started in July, days after a fire severely damaged the union’s headquarters on the Detroit River.

Besides the new pacts with General Motors, Ford and now Fiat Chrysler Automobiles, it also has a new president and new internal rules while reclaiming some of the militancy that made it so feared in the 1960s and ’70s.

Despite an embezzlement scandal that claimed its president and has led to criminal charges against three former officers, including two vice presidents, and other ranking officials responsible for union funds, the UAW managed to maintain solidarity throughout a 40-day strike against GM.

It also negotiated new contracts with Mack Truck after a brief strike, Aramark after a longer walkout, General Dynamics and Detroit Axle.

Arthur Wheaton, a professor at Cornell University’s Institute for Labor Relations, says GM probably was the big loser during this year’s negotiations.

The automaker’s poor negotiating strategy and labor relations resulted in a 40-day walkout and ratification bonuses of $11,000 per worker to help seal the deal, Wheaton says.  Despite the scandal and the cloud hanging over the union’s leadership, the strike earned a surprising amount of support from political figures and communities across the Midwest.

The closing earlier this year of GM’s assembly plant in Lordstown, OH (below, left), continues to haunt both GM and the UAW, which was blasted on social media for withdrawing its lawsuit over the plant shutdown it had filed prior to the settlement that ended the strike.

The UAW agreed to drop the suit as part of the negotiations while GM moved quickly to close a deal on a joint venture to build a $2.3 billion battery plant near Lordstown. The automaker also agreed to underwrite a $40 million mortgage for the company that is buying the shuttered assembly plant.

The union won “overall wage increases for all three contracts but nothing extravagant,” while some of the inequality between new hires and temporary workers, compared with legacy workers, was reduced, Wheaton notes.

“Overall the auto industry should remain profitable as sales start to shrink next year,” he adds.

The FCA contract, covering 47,000 UAW members, was ratified 71%-29% last week and follows the basic pattern. As at Ford, the ratification bonus of $9,000 per worker is smaller than at GM, but other elements of the financial package were identical, including bonuses equal to 4% of union members’ base wage in the first and third years of the pact as well as a 3% general wage increase in the second and fourth years.

The two-thirds of hourly FCA employees who are new hires now will have a chance to earn the top wage of $32 per hour by the end of the contract. The agreement also will make hundreds of temporary employees full-time with better wages and health care benefits, which are some of the best offered in American industry.

“Every full-time production employee currently at FCA will be at top rate by the end of this four-year agreement,” says Cindy Estrada, UAW vice president and director of the union’s FCA Dept. “All temporary workers now have a defined pathway to full-time (status) and top pay as well.”

For many union members at FCA, some of whom currently make $16 per hour, the economic package will be “life-transforming,” UAW spokesman Brian Rothenberg says.

“We wouldn’t be the company we are today without the contributions of our UAW-represented workforce, and this contract recognizes and rewards their dedication in helping us achieve that success,” Mark Stewart, chief operating officer-FCA North America, said after the contract was ratified.GM Lordstown line (2).jpg

GM Lordstown line (2)

The new UAW-FCA pact adds $4.5 billion in new investments to the previously announced $4.5 billion investment that includes a new Detroit assembly plant. FCA says those investments will create 7,900 jobs, including 5,000 at the Detroit facility alone.

Over the past four years, FCA has created 6,500 new or secured UAW-represented jobs and has invested more than $8 billion in its U.S. operations, exceeding its 2015 commitments, Stewart says.
The UAW also succeeded in restoring to the new contract skilled-trades job classifications that were dropped under the late FCA CEO Sergio Marchionne’s “World Class Manufacturing” system that had been adopted in most FCA plants with the help of the late General Holiefield, the former head of the union’s Chrysler Dept. who was implicated in the unfolding scandal.

GM has filed a racketeering lawsuit against FCA, claiming the Italian-American automaker paid millions of dollars in bribes to UAW officials to corrupt labor agreements as part of a scheme to influence a failed merger in 2015. FCA calls the lawsuit “meritless” and implies it was meant to disrupt its proposed merger with French automaker PSA.

The UAW still faces enormous challenges under new President Rory Gamble, such as satisfactorily addressing issues raised by the federal corruption probe; rebuilding the union’s political influence, which had atrophied under ex-President Gary Jones; and capitalizing on the new spirit of activism in the UAW’s ranks.


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