FCA And UAW Reach Tentative Agreement, Could Wave Goodbye To Two-Tier Wage System

The United Auto Workers and Fiat-Chrysler Automobiles successfully reached a tentative agreement last night following lengthy contract negotiations . The two parties agreed on a new four year contract that could put an end to the two-tier wage structure that currently divides unionized autoworkers.

FCA CEO Sergio Marchionne said the two-tier wage system “will go away over time,” under the new contract, according to Reuters, and analysts believe the contract will also entail a wage increase. Currently, new hires are paid maximum hourly wage of $19.28, while those with seniority earn $28.

As union discussions with Ford and General Motors continue, the potential disbandment of the two-tier wage system over at FCA could get the ball rolling for its Big Three peers to do the same. Union members will review the contract before a union ratification vote is scheduled to make it official.

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