From the November-December 2015 issue of News & Letters

Detroit—The chasm between rank-and-file auto workers and their bureaucratic leadership has been growing for decades as dramatically revealed by the overwhelming rejection of the contract negotiated by the United Auto Workers (UAW) and Fiat Chrysler.

UAW President Dennis Williams had expressed complete confidence that the proposed contract would be ratified. But 65% of Fiat Chrysler workers voted it down, forcing Williams to renegotiate.

Chrysler’s 40,000 workers approved the second contract, but only after the UAW bureaucracy cut the voting period from a week to two days, giving less time for the opposition to mobilize than for the first vote.

The two-tier wage system was the biggest target of the workers’ opposition to the original contract. This concession forced from the workers during the bankruptcy proceedings in 2007 has always rankled them, because it violated the long-held union principle of equal pay for equal work.

ANTI-UNION TWO-TIER SYSTEM

Second-tier entry-level workers were making $16 to $20 an hour, compared to $29 an hour for veteran workers. It was a source of dissension among the workers who live with this disparity every day. This was loudly and clearly expressed by UAW delegates at the pre-contract conference held in Detroit.

The way this was dealt with in the first contract did not go far enough for the workers. Second-tier workers would get a wage raise, but would not get the same as veteran workers. This was not acceptable.

There were other problems for the workers, who demanded more information about future plant production plans, healthcare and corporate investments. Workers would also get a $3,000 signing bonus upon the contract’s approval.

The contract which workers forced to be renegotiated had significant improvements: Second-tier workers will get full wages in eight years, and second-tier workers with four years service will be paid full wages at the end of this four-year contract. Those workers with two years service will get an $8 per hour wage increase by the end of the contract.

There is also no change in healthcare, and veteran workers get two wage increases of 3%, plus two bonuses of 4%. The new profit-sharing formula is $800 for every 1% of North American profit margin. Veteran workers get a $4,000 signing bonus, and entry workers get $3,000. The contract includes $1.7 billion in pension funding, and a commitment that $5.3 billion would be invested in U.S. plants.

Forcing Williams to renegotiate resulted in a much-improved contract and shows the power of a strike, which the workers were prepared to do. They pressured both Williams and Fiat Chrysler to make those improvements.

–Andy Phillips