New UAW Deal Potentially Avoids Strike With Elimination Of Two-Tier Pay System

The Fiat-Chrysler contract proposal agreed upon by UAW negotiators Wednesday night could rid of the detested two-tier pay system currently in place, The Detroit Free Press reports. Details of the proposal, which are expected to be announced sometime today during a press conference, were confirmed by a source close to the matter who asked not to be named.

An initial contract proposal was shot down by union workers last month as it failed to rid of the two-tier pay system that currently affects many younger or less experienced workers at FCA plants. Under the new proposal, entry-level workers could make the same $29 an hour wage as the more experienced workers currently do over the course of eight years. Previously, entry-level workers would top out at $19 an hour.

Other aspects of the new proposal included a 3% raise in the first and third years of the contract for those hired before 2007, equal profit sharing based on hours worked for all employees and a $3,000 signing bonus once the contract is ratified. Spokespersons for both FCA and the UAW declined to comment on the proposal.

It is also understood UAW workers will be notified of future production plans and changes once the proposal is disclosed in order to ease job security concerns. FCA said it will invest $5.3 billion in new products and plants going forward, with much of its North American production being split between the U.S. and Mexico.

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