Chrysler workers rejected a tentative agreement on a new collective bargaining agreement by a wide margin.
Voting began a few days after the UAW and Fiat Chrysler Automobile announced on September 15 that the two sides had reached an agreement on a new contract.
The Detroit Free Press reported on September 19 that UAW President Dennis Williams told a meeting of Chrysler union leaders that he thought that the agreement was “balanced and thoughtful” and that members would ratify it.
But when the results were announced on October 1, 65 percent of the workers had voted no.
The margin of rejection was even higher in some locals. At Chrysler’s Jeep plant in Toledo, Ohio, 87 percent of the production workers and 80 percent of the skilled trades workers voted no.
For many, the new agreement didn’t go far enough toward eliminating the two-tier wage system, which allows Chrysler to pay new production workers about $10 less an hour than those on the job in 2007.
The union agreed to the two-tier system when Chrysler was on the verge of bankruptcy.
But Chrysler reported a $4.1 billion profit in 2014, and members thought that it was time to start dismantling the two-tier system.
In the spring, Williams said that he wanted new contracts with Ford, GM, and Chrysler to build a bridge toward the elimination of the two-tier system.
But according to its opponents, the tentative agreement was a bridge to nowhere.
“It should be equal pay for equal work,” said Jennifer Daubenmeyer, a tier-two Chrysler worker to the Detroit News. “We’d like to see an opportunity at some point to get to the point to what (the tier-one workers) are making. We’re not asking for it now.”
Daubenmeyer may have had in mind an agreement that Unifor, the Canadian autoworkers’ union, reached with auto companies in Canada that creates a ten-year ladder of pay raises that eventually brings the pay of tier-two workers up to that of tier-one workers.
Instead, the Chrysler pact raised wages of tier-two workers in increments over a four year period, but the raises maxed out $5 an hour less than tier-one workers.
Most tier-two workers would have continued to make substantially less than the tier-two maximum and many would have to wait seven years before they reached the tier-two maximum.
The agreement also created two new tiers for production workers: the tier-two maximum for workers at Chrysler’s Mopar auto parts plant and the company’s axle factory was $3.35 an hour and $3 an hour respectively less than the maximum for other tier-two workers.
In an open letter to Chrysler Chief Executive Officer Sergio Marchionne, Denny Walker Crum, a tier-two worker in Toledo, called the tentative agreement “disrespectful.”
“(Wouldn’t you consider it disrespectful) if your employer told you that after working for seven years, you will still make five dollars an hour less than the person working next to you doing the same job?” asked Crum. “Is it not disrespectful for the company to tell you that your time is worth less than the person next to you? Is it not disrespectful that one would have to work for three quarters of a decade and STILL isn’t worth the same as their coworkers?”
Other two-tiered workers thought that the new contract would raise many of them to tier-one status and were disappointed when they learned that it did not.
They thought so because a union summary of the 2011 contract said that by 2015, there would be a cap in place that would reduce the percentage of tier-two workers to 25 percent.
Currently, 43 percent of Chrysler’s production workforce are tier-two workers. Many thought that when the cap went into effect, they would be bumped up to tier-one pay.
Despite what the union said in the summary, there was no language in the old contract about setting a cap and the new agreement did not address the issue.
Disappointment with the agreement was not limited to tier-two workers. The nearly two to one rejection margin suggests that many tier-one and skilled trades workers were unhappy with it.
Tier-one workers had gone without a pay raise for a decade, and many were looking for a raise that would recover some of the lost buying power that the wage freeze had cost them.
According to the US Bureau of Labor Statistics, it costs $122 today to buy what $100 bought ten years ago.
But the agreement only called for two 3 percent raises over the four-year span on the agreement and two lump sum payments. Workers also could earn a bit more through production bonuses if they met goals set by the company.
The agreement also did not restore cost of living raises that workers gave up to keep Chrysler solvent.
The agreement established a new health care cooperative to replace workers’ health care benefit, and there was concern among members that the new cooperative would soon start charging workers more for health care.
Finally, the agreement said that Chrysler would invest $3.5 billion in its US facilities, but there was no specific language that identified how the money would be spent.
Workers were concerned that the vague language would allow Chrysler to move work to other locations, which would cost some workers their jobs. Workers are also expecting Chrysler to shift some work now being done in the US to Mexico.
Skilled trade workers such as tool and die makers, millwrights, electricians, etc., were wary of Chrysler’s past practices of taking away their work by deskilling jobs and outsourcing work. The agreement did little to address these concerns.
On the Monday after the union announced the rejection, Chrysler and the UAW resumed negotiations.
In his open letter, Crum urged Williams to come back with a better offer.
“Please do what a union is supposed to do,” wrote Crum. “Get us equal pay for equal work.”