UAW members have ratified a new collective bargaining agreement with Chrysler. In contrast to an earlier vote in which Chrysler UAW members soundly rejected a tentative agreement, 77 percent voted yes this time around.
Shortly after Chrysler workers ratified the agreement, the union announced that it had reached a tentative agreement with GM.
The new Chrysler collective bargaining agreement addresses some of the criticisms that members raised about the rejected tentative agreement. .
Most significantly, the new collective bargaining agreement creates a path that will gradually eliminates the wide wage differential between workers hired after 2007 and those hired before.
In 2007, when the US auto industry was struggling financially, the UAW agreed to allow GM, Ford, and Chrysler to pay new hires a substantially lower wage than that of workers already on the job, thus creating a two-tiered wage system.
Before bargaining with US auto companies began this year, many UAW members including tier 1 workers told the leadership that equal pay for equal work should be a bargaining priority for the union.
The rejected tentative agreement closed the gap between tier 1 and tier 2 workers, but didn’t eliminate it.
Under the new contract, tier 2 workers with at least four years on the job will be making tier 1 pay by the end of the contract, which expires in 2019.
All other tier 2 workers will reach tier 1 status within eight years.
A small number of workers will remain in tier 2 status. Those hired at Chrysler’s parts division, MOPAR, after the new collective bargaining agreement goes into effect will be paid a tier 2 wage.
Temporary workers will also be paid a tier 2 wage, but the contract contains language that limits the use of temporary workers.
Another difference between the agreement that was rejected and the one that was ratified is that the ratified agreement maintains the workers’ current health care plan, one in which the company pays the full premium and workers’ out of pocket costs for services are much lower than the national average.
The rejected collective bargaining agreement established a health care cooperative that was supposed to replace the current plan, but members were wary that the new cooperative would result in lower benefits and higher costs.
The ratified agreement does require tier 2 workers to pay a $100 deductible for emergency room visits that don’t result in hospital admissions and a $50 deductible for urgent care visits. Tier 1 workers began paying these deductibles in 2011.
The bargaining team told members that it expects health care costs to increase substantially during the four-year period of the contract and that the union and the company would continue to discuss ways to contain costs.
The implementation of the Affordable Care Act’s (ACA) excise tax could also affect health care costs in the future.
Because of the ACA, health care plans that pay exceptional benefits like the one at Chrysler will be subject to an excise tax in 2018.
Such a tax could cause workers in these plans to pay more for health care.
The collective bargaining agreement limits the increased cost that workers may have to pay to a maximum deductible of $400 for individuals and $800 for families.
Another concern that caused the original tentative agreement to be rejected was its vague language about how Chrysler would invest the $3.5 billion that the company plans to invest in its US operations.
Not knowing where the money would be invested made workers uneasy about the future stability of their jobs.
The new contract specifies where the new investments will be made.
It identifies four plants where staffing will increase by an estimated total of 2900 workers; 12 plants where the current workforce will be retained, and two plants where the workforce could potentially be reduced by 2856 (Indiana Transmission Plant ll, 450, and Warren Truck Assembly, 2406).
The ratified contract also contains language that strengthens job security protections for skilled trade members and places more restrictions on outsourcing skilled trade work.
Skilled trade workers at Chrysler, electricians, tool and dye makers, millwrights, etc., have been critical of Chrysler’s moves to reduce their work by deskilling and outsourcing it.
The ratified contract reduces the time that outsourcing contractors have to complete a job from 35 to 30 days and gives union representatives more opportunities to review the company’s proposals for outsourcing work.
The company also agrees to add 150 new apprenticeship positions in 2016.
After UAW’s members ratified the revised Chrysler contract, the union turned its attention to GM.
A little before midnight on October 24, the union reached a tentative agreement with GM.
The details of the agreement have not been released.
UAW’s GM negotiating team will present details of the agreement to UAW’s National GM Council in Detroit on Wednesday, October 28.
If the national council, which is composed of local leaders at GM plants, votes to recommend ratification, the union will publish the tentative agreement on its website for members to read and review.
After that, members will have an opportunity to ratify or reject the tentative agreement.