United Auto Workers President Dennis Williams Getty Images

United Auto Workers President Dennis Williams

Workers Reject Fiat Chrysler Contract Offer

Workers at the U.S. arm of Fiat Chrysler Automobiles have rejected a proposed four-year contract that would have provided broad raises, the United Auto Workers union said Thursday.

Sixty-five percent of the 40,000 Fiat Chrysler employees represented by the UAW who voted on the new contract offer rejected it, the union said in a statement.

"What I love about our organization most of all is that no matter what we do, what action we take, the ultimate decision and the power of the union is our members and they make the final decision," the UAW president, Dennis Williams, said. "We don’t consider this a setback; we consider the membership vote a part of the process we respect," Williams added.

A major sticking point in the contract is the lack of a cap on the number of employees in the lower tier of the carmaker's two-tier wage system. Employees in Tier 2 earn about $16 an hour to start, compared to the $28 per hour for Tier 1 employees. The lack of a cap means that senior Tier 2 employees are not bumped up to the higher pay scale to keep quotas.

The second pay tier was negotiated with the union in 2007 when FCA and General Motors were reorganizing to come out of bankruptcy.

In mid-September, the union reached a tentative agreement with the U.S. subsidiary of FCA for a new four-year labor contract that would serve as a template for the UAW's contracts with two other major US automakers -- General Motors and Ford -- which are also up for renewal.
The union has historically ensured that the Detroit Three automakers do not face competitive disadvantages by negotiating similar four-year contracts with each company.

GM has 50,000 employees who are UAW members and Ford has 52,000 unionized workers.

Copyright Agence France-Presse, 2015

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