United Auto Workers reject Fiat Chrysler contract by wide margin

Vote marks the first time in more than three decades that a tentative national labor contract has been rejected by the UAW

Contract negotiations between United Auto Workers union and US carmakers hit an impasse on Thursday as workers at Fiat Chrylser rejected a deal, the first time in over 30 years that a tentative national labor contract has been rejected by United Auto Workers (UAW).

UAW members rejected a tentative agreement between with Fiat Chrysler by 65% after a ballot on Tuesday, the results of which were finalised on Thursday.

UAW members at large assembly plants in Toledo, Ohio, and Sterling Heights, Michigan, all rejected the pact as did most other factories, by a wide margin.

“We will gather the issues together; notify FCA [Fiat Chrysler] that further discussions are needed. We don’t consider this a setback; we consider the membership vote a part of the process we respect,” Dennis Williams, president of the UAW, 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,” he said.

Ahead of the vote, workers had expressed concerns about the continuance of a two-tier pay structure, healthcare benefits and the possibility that some car production would be shifted to Mexico.

About 40,000 union Fiat Chrysler employees – and about 100,000 Ford and GM employees – have been working under a contract extension since 14 September.

The UAW began bargaining with Ford, GM and Fiat Chrysler in July. Fiat Chrysler was selected as the lead company in the talks, making it the focus of bargaining.

The new deal had pay raises but didn’t end a lower wage rate for those hired after 2007. These “new” hires start at about half the $29 an hour wage that the long-serving workers are paid. The union originally agreed to a two-tier pay structure back in 2007 when then-Chrysler was near bankruptcy.

When a tentative agreement was announced in September, Fiat Chrysler CEO Sergio Marchionne agreed that tiered wages were unfair and said the negotiators came up with a carefully crafted agreement “whereby that issue will go away”.

In a statement released on Thursday, the company expressed its disappointment with the vote. “The tentative agreement was designed to yield a strong and competitive Fiat Chrysler Automobiles US, thus providing stability for our workforce and opportunity for future growth and investment in an increasingly complex global marketplace,” the statement read. “The company will make decisions, as always, based on achieving our industrial objectives, and looks forward to continuing a dialogue with the UAW.”

“This is our time now. The UAW has given back and given back, making concessions after concessions. I think Sergio may have a hard lesson to learn here but we are ready for that,” Phil Reiter told the Wall Street Journal. For the past two years, Reiter, 44, has been working for Fiat Chrysler in Toledo.

The union will now gather issues and notify the Fiat Chrysler that “further discussions are needed”.

“We don’t consider this a setback; we consider the membership vote a part of the process we respect,” said Williams.

The Associated Press contributed to this report.


Jana Kasperkevic in New York and agencies

The GuardianTramp

Related Content

US court orders temporary halt to Chrysler takeover by Fiat
Disgruntled bondholders argue they have been treated unfairly in comparison to other creditors, such as the treasury and auto unions

Andrew Clark in New York

08, Jun, 2009 @10:52 PM

Article image
Chrysler files for stock market IPO

Fiat seeking to buy United Auto Workers' stake but auto giant set to join General Motors and Ford in being publicly traded

Dominic Rushe in New York

23, Sep, 2013 @10:13 PM

Fiat takes 35% stake in Chrysler
Technology- and cost-sharing deal will throw a lifeline to the floundering US giant – but will it be enough?

Andrew Clark in New York

20, Jan, 2009 @6:10 PM

Article image
Chrysler creditors battle to derail Fiat sale
The lenders, mostly private equity firms and hedge funds, will learn later today whether they have managed to persuade a New York judge to halt Chrysler's fast-track sale to Fiat

Graeme Wearden

05, May, 2009 @12:19 PM

Article image
Chrysler chief warns broken Europe 'maiming auto industry'
Sergio Marchionne attacked European leaders and said only a united approach could end the slump in Europe's car market

Dominic Rushe in New York

15, Jan, 2013 @8:56 PM

Article image
Fiat Chrysler recalls 8,000 more Jeeps over wireless hacking
Latest recall designed to protect connected vehicles from remote manipulation, says automobile company

Alex Hern

07, Sep, 2015 @9:15 AM

Article image
Chrysler declares itself bankrupt
Obama condemns hedge funds that vetoed last-minute rescue plan

Andrew Clark in New York

30, Apr, 2009 @6:15 PM

Article image
After Chrysler, Fiat plans merger with Opel to create car industry giant
Proposed group would be world's second largest after Toyota


04, May, 2009 @12:54 AM

Article image
Ferrari kickstarts split from Fiat Chrysler by filing for NYSE share listing
Luxury carmaker files for IPO on New York stock exchange as part of plan to become separate £7bn firm by early 2016

Gwyn Topham Transport correspondent

23, Jul, 2015 @12:06 PM

Article image
Boss of Chrysler and Fiat tells Europe to 'get serious' on solving debt crisis

Speaking at Detroit auto show, Sergio Marchionne says he is looking for a third partner to help support his car alliance

Dominic Rushe in Detroit

10, Jan, 2012 @5:59 PM