Fiat-Chrysler and negotiators for the UAW didn’t entirely understand how workers under the automaker’s two-tier pay system felt when trying to strike a new contract with the automaker, The Detroit Free Press reports. Employees on both sides of the two-tier system banded together to kill the recent FCA proposal, mainly because it did not rid of the two-tier pay system and did not place a include a promised 25% cap on the number of entry-level workers at FCA.
According to Thomas Geoghegan, a Chicago-based labor lawyer, the underlying force that ultimately led to the proposal’s demise was that many of the younger workers earning the lower wage are becoming aware of the wage stagnation phenomenon. Geoghegan told the Free Press a two-tier wage structure is “like running up a white flag that younger workers are going to be abandoned.”
FCA CEO Sergio Marchionne has agreed the two-tier wage structure should be put to an end, however instead of ridding of the two-tier system, the proposal he and UAW negotiators agreed on only narrowed the gap between the two pay tiers. UAW President Dennis Williams said the new proposed wage schedule “creates a structure that can be built upon in the next round of bargaining,” but UAW workers weren’t having it.
One veteran UAW worker the Free Press talked to, Bill Parker, noted that it took him just 90 days to qualify for the union’s top pay scale in the past and that workers of his generation also have a defined benefit pension and a 401k. Their younger colleagues, meanwhile, could take eight years or longer to reach the union’s to pay and their retirement money is solely tied to 401k plans.
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