A tentative contract agreement has been reached by Fiat Chrysler Automobiles and United Auto Workers, one that FCA CEO Sergio Marchionne describes as “transformational.”
Detroit News business columnist Daniel Howes says this proposed deal sets a high bar.
Howes thinks the companies are signaling to employees and industry analysts that some significant changes are coming.
He says that not only is everybody, ”going to get some kind of raise,” but also that the controversial second-tier wage that was instituted in the 2007 agreement is going to start going away over time.
Howes expects first-tier workers to get a small pay raise, their first in ten years.
He says that though Marchionne and UAW President Dennis Williams are satisfied, it isn’t a done deal yet.
“This is not just (about) getting a tentative agreement, it’s always about getting the deal ratified,” he said, “The members of the UAW structure are the last word, except in very extreme and unusual circumstances.”
In addition to wage adjustments, the union has also been very interested in establishing a health care pool, according to Howes. He explains that by pooling all the workers together, the UAW hopes to increase its overall buying power in the health care marketplace.
“All three companies are very open to this idea,” Howes said, "Because anything that can restrain a growth of health care costs for them is a positive.”
Howes tells us that Marchionne was clear in a Tuesday press conference that once the deal had been ratified, he would move on to his “number one objective.”
“He needs to find a merger partner and he wants that merger partner to be General Motors. And just because CEO Mary Barra says, ‘we’re not interested,’ doesn’t mean … he’s not going to try to make it happen.”