UAW Chooses Fiat Chrysler as Its Target to Set Pattern for a Contract Deal

The United Auto Workers (UAW) has planned to accelerate its bargaining efforts with Fiat Chrysler Automobile NV to form a template for new labor contract. The UAW disclosed its decision on Sunday.

The decision of choosing Fiat Chrysler’s FCA US unit as the target company for shaping the new contract was disclosed by the union on Sunday. The decision has kick-started the intense negotiation period which is expected to focus on a two-tier wage system that has financially benefitted auto makers but ranked workers.

The current contract of UAW with Fiat Chrysler, General Motors Co. and Ford Motor Co. expires on Monday. The labor talks between the union and Detroit's auto makers routinely extend beyond that deadline.

UAW President Dennis Williams said, “All three companies are working hard toward a collective bargaining agreement. All three companies have been working with UAW bargaining teams toward a collective bargaining agreement and continue to do so”.

Mr. Williams and other union leaders said they want wage increases for the UAW's roughly 140,000 rank-and-file members at Detroit's three auto makers. Most of them haven’t received base pay raises in a decade.

Specifically, they want to eliminate a controversial two-tier wage system that pays newer factory hires about $9 an hour less than veteran employees for doing the same assembly-line work.

Fiat Chrysler Chief Executive Sergio Marchionne has publicly called for ending the pay structure. The financial crisis forced GM and Chrysler to undergo government-brokered restructurings in 2009.

Fiat Chrysler is the smallest and least profitable one of the Detroit car makers and has the highest percentage of lower paid workers. It has received a $9 to $10 wage advantage over GM and Ford.