“The United States now has the highest percentage of low-wage jobs among developed nations. The purchasing power to buy consumer goods, such as the vehicles they build, a house, or to send a child to college doesn’t exist, even with a recovering economy,” said Williams earlier this summer.
The weakest of the Detroit Three, FCA – aka Chrysler, is the company that will set the pattern on a collective bargaining agreement as the UAW target. The current four-year contract expired at midnight. FCA US confirmed it is the UAW target, but “as negotiations are ongoing, the Company can offer no further comment at this time.” Traditionally the UAW target was announced on Labor Day, but this year it came the Sunday after. More developments that are unusual could follow this year.
UAW leaders say they are looking for an agreement, not a confrontation. However, there are contentious issues that involve creating more jobs and eliminating the two-tier wage structure for workers that see diminished salaries and benefits compared to employees with longer time in service.
With annual vehicle sales tracking well above 17 million, and with strong profits at the Detroit Three, there could be many potholes along the road to an agreement. Moreover, the no strike clauses imposed by the Obama Administration as part of the taxpayer bailouts of bankrupt GM and Chrysler no longer apply.
“All three companies are working hard toward a collective bargaining agreement. At this time, the UAW has selected FCA US to be the lead bargaining company,” said Dennis Williams, President of the UAW. “All three companies have been working with UAW bargaining teams toward a collective bargaining agreement and continue to do so.”
The Center for Auto Research estimates that with medical coverage – also a point of contention – and other benefits added in, GM’s labor cost is $55 an hour. Ford Motor’s cost is $57. Chrysler hourly labor costs are $47. This is roughly at parity with the average among all offshore brand, non-union plants in this country.
FCA CEO Sergio Marchionne has said that he thinks that Chrysler workers should share in the current success of the company. The issue is just how big a piece of the pie they will be offered.
Moreover, there is the possibility that the old “pattern” ways of dealing with the Detroit Three via a UAW target might be outdated. There could be three different contracts in place when all is settled.
UAW Vice President Jimmy Settles
In a message to UAW members at Ford earlier today, UAW Vice President Jimmy Settles released the following statement:
See the original letter
Greetings to all UAW-Ford Members:
This communication is to provide you – and especially our newer members for whom the bargaining process may be unfamiliar – an update on negotiations and where we are in that process.
Typically, negotiations take place over a period of several months. Our members at each local were asked to participate in a strike authorization vote and overwhelmingly gave the International Union permission to call a strike when necessary. A strike is difficult and always the last resort when negotiations break down. We are not at that point. As you are aware, the current contract expired. We have agreed with the Company to extend the terms of the existing 2011 contract. This is not unusual and commonly occurs when either another company has been identified as the lead, as is the case here, or when a viable end is in sight and bargaining continues to progress.
Numerous subcommittees have been negotiating specific aspects of the contract since July; most have reached tentative agreements. While we continue to meet on outstanding subcommittee issues, larger economic issues remain.
Each round of negotiations presents its own unique challenges. We are determined to negotiate the best possible contract for our members while retaining good American jobs.
While Fiat Chrysler Automobiles (FCA US) is setting the pattern by negotiating first, we stand ready and able to complete our negotiations. As UAW President Dennis Williams and Vice President Norwood Jewell continue to bargain with FCA US, it is imperative that we, the UAW-Ford members, stand with our brothers and sisters at FCA US in solidarity and support. Our unity is our strength.
Many entities against us are attempting to skew perception. I ask that you be cautious of the sources from which you receive your information and the material you choose to share. It is imperative that we are not misguided by rumors or misinformation. Again, unity is our strength.
In the midst of negotiating the future of the American autoworker, solidarity is needed now more than ever. We cannot run at the first sign of trouble, nor jump to conclusions at every speculation. We remain in solidarity with you, our retirees and our brothers and sisters at FCA US and General Motors, and encourage you to do the same.
We look forward to presenting a tentative agreement for ratification that meets the needs of our entire membership.
In Solidarity, Jimmy Settles, Vice President and Director, UAW Ford Department
(Editor – GM statement that is one day old: “This is to advise that the International Union, UAW and General Motors Company have signed a Memorandum of Understanding to extend the 2011 National Agreement, which will continue in full force.”)
FCA confirms that its current contract with the UAW will be extended on an hour by hour basis as bargaining continues. (The Contract Expired at midnight Tuesday 15 September. – editor)