Done deal: UAW confirms ratification of FCA contract

UAW members overwhelmingly ratified a new four-year agreement with Fiat Chrysler Automobiles, giving the union its first new contract with the Detroit Three since formal negotiations began in July.

The overwhelming support — 77% voted yes — comes almost six weeks after the old contract was set to expire. But there is little rest for the national bargaining team that began negotiations with General Motors Thursday and must still complete talks with Ford.

UAW President Dennis Williams has made it clear that it expects richer agreements from Ford and GM, which are larger companies with bigger profits.

At FCA, workers appreciated that the second tentative agreement their leadership delivered was richer than the first and they voted to ratify it. Breaking down the vote, production workers were 77% in favor; skilled trades 72% and salaried workers 87%.

"It’s beneficial for me," said Kevin Johnson, of Warren, who works at the company's Jefferson North Assembly Plant in Detroit. "I eventually get an $11 pay raise...that doesn’t happen at most companies."

Johnson, who said workers are relieved that they can now return to just doing their jobs, said he voted against the first contract because it didn't include a pay raise to the top wage that workers hired before 2007 make.

Ratification of the new contract comes just three weeks after the union's members soundly defeated the first agreement that the UAW recommended to its members. That defeat forced the union to go back to FCA and negotiate bigger raises and bonuses along with several other key changes to the contract. The first failure also caused the union to overhaul its communication strategy.

"The resolve of our membership and the dedication of our negotiating team has produced an agreement that affords UAW members a strong wage package and job security while still allowing the company to competitively produce high quality vehicles for our customers,” UAW President Dennis Williams said in a statement Thursday in announcing the ratification.

The company, in a statement, said, "FCA US is pleased that UAW members have voted to ratify a new four-year national labor agreement. This agreement represents an investment in our U.S. workforce and recognizes its contributions to the company’s growth over the past six years. With the bargaining process now complete, the company and our employees can look forward to continuing to build world class products, investing in our operations and achieving the targets set out in our five year business plan."

This is the first new contract since the former Chrysler filed for bankruptcy in 2009 and the union gave up its right to strike during the 2011 negotiations. Many thought a strike was a real possibility at Chrysler, but negotiators, against a backdrop of a strong global economy, were able to keep workers on the line through two tentative agreements and two sets of voting during this round of talks.

With U.S. auto sales reaching historic levels again and plants working around the clock, any disruption in production would have put FCA at a competitive disadvantage.

Fiat Chrysler now has four years of labor peace and can proceed with its ambitious $5.3-billion product and plant investment plans with a largely happy workforce.

“UAW members at FCA have obtained a strong agreement that provides substantial wage gains, fairness in the workplace, and job security," said FCA US Vice President Norwood Jewell, in a statement.

"Because of the strength and support from our membership, our bargaining team was able to negotiate a contract which promises a secure future for our members, their families and their communities,” Jewell said.

Workers at almost all local UAW units from Belvidere, Ill., to Kokomo, Ind., to Detroit voted in favor of the proposed contract.

The new agreement delivers signing bonuses and raises for both entry-level workers and longtime workers and provides second-tier workers with an eight-year path to $29 per hour, making them nearly equal to workers hired before 2007 and effectively eliminating the two-tier wage system.

It also provides entry-level workers with a $3,000 signing bonus and elevates their wages from $15.78 to $19.28 per hour to a new range of wages that starts at $17 per hour and tops out at about $29 per hour in eight years or less.

While some workers objected to the length of time of the wage progression, the UAW was able to win over many workers by emphasizing that all workers are guaranteed to see their hourly pay rise at least to $22.50 within the length of the four year contract. Workers hired before 2007 will now get a $4,000 signing bonus, 3% raises in the first and third years of the contract and 4% lump sum bonuses in the second and fourth years of the contract.

The second agreement also eliminated a controversial proposal to form a health care cooperative that members feared would lead to higher health care costs and a more flexible attendance and vacation policy.

"I think this contract was presented much more clearly," said Kristin Dziczek, director of the labor and industry group for the Center for Automotive Research in Ann Arbor. "It included larger raises for the people who were considered tier two before and are now called 'in progression workers,' and it was much more clear about what changes were being made to health care."

"I think they packaged it in a way that was much more appealing even though it likely doesn’t cost Chrysler more money than the first agreement," Dziczek said.

Contact Alisa Priddle: 313-222-5394 or apriddle@freepress.com. Follow her on Twitter @AlisaPriddle

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.