UAW leaders OK richer Fiat Chrysler contract

DETROIT – The United Auto Workers union unveiled a richer proposed contract with Fiat Chrysler on Friday, a week after angry union members voted down a previous agreement.

The new agreement would gradually eliminate a much-maligned tiered pay system and bring all U.S. factory workers to the same wage over eight years. The previous agreement had only promised a top wage of $25.35 per hour for lower-tiered workers by 2019, which is less than the $29.76 per hour that longtime workers would make at that point.

The union agreed to lower wages for new hires in 2007, a few years before Chrysler fell into bankruptcy protection. But members have resented the varying pay, and the company’s current CEO, Sergio Marchionne – who took over when Chrysler merged with Italian automaker Fiat in 2009 – has called the two-tier wages “unsustainable.”

UAW President Dennis Williams said the union had always promised to bridge the gap in pay, but he understood that members wanted to see exactly how that would be accomplished. Under the new agreement, workers with four or more years of experience would make the $29 hourly wage within four years; workers with less experience would make between $22.50 and $28 in four years and top wages in eight years.

Union leadership voted Friday afternoon to recommend that members ratify the new agreement, which covers around 40,000 workers at 23 U.S. plants. Union members will likely start voting next week.