Report: New UAW Contract Could Boost Tier 2 Pay Up to $29 Per Hour

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Bloomberg reported (via Automotive News) Thursday that a proposed contract brokered Wednesday night between the United Auto Workers and Fiat Chrysler Automobiles would raise Tier 2 workers’ pay to $29 per hour, up from $25 per hour, after an eight-year, “grow-in” period. The separation between the two classifications of union employees — veteran Tier 1 and more recently hired Tier 2 — was a major point of contention for the workers, who voted down the proposed contract last week by a margin of nearly 2-to-1. Roughly 40 percent of FCA’s union employees are Tier 2 workers, a much higher proportion than General Motors and Ford. On average, those employees are paid $9 to $12 less per hour less than workers hired before the recession. The proposed contract, according to the report, would not eliminate the tiered system, but instead bring closer the two pay scales. The contract also wouldn’t cap the number of Tier 2 workers hired by the automaker. The union will take the proposed contract — which was negotiated with FCA only hours before a proposed strike — to its workers on Friday. “We heard from our members, and went back to FCA to strengthen their contract,” UAW President Dennis Williams told employees Thursday. “We have made real gains and I look forward to a full discussion of the terms with our membership.” Senior employees would get the same raises proposed in the rejected contract.