Fiat Chrysler Automobiles seeks to get rid of two-tier wage system in the US

Article by Christian Andrei, on May 26, 2014

Fiat Chrysler Automobiles is seeking to get rid of the two-tier wage system in the United States as its American unit is set to discuss its next labor agreement with the United Auto Workers in 2015. Under the system, newer workers get lower pays than older employees. New hourly workers receive just under $16 per hour, which increases over time to more than $19.

Veteran workers, meanwhile, earns over $28 an hour. Fiat Chrysler wants to gradually phase out the higher scale as older workers exit the carmaker, chief executive Sergio Marchionne remarked, adding that he targets to hold discussions with the UAW this year instead in 2015.

Marchionne has labeled the two-tier wage system as his "biggest problem.” Union officials have remarked that they hate and want to eliminate the two-tier wage system. Norwood Jewell, a nominee for vice president at UAW, said in December 2013 that the tow-tier current system was a "financial unfortunate" resulting from the industry weakness in 2007.

He noted that stronger economy of today should help the UAW’s case in the next round of negotiations. The Detroit 3 have quipped that the entry-level wage scale is needed to allow them to better compete on labor costs against Japanese, South Korean and German carmakers who have plants in the US.

Marchionne credited the union with increased flexibility over the last few years. He, however, said that he is hoping that the UAW would not call for a higher level of pay for all workers, since at the end of the day, workers share the pain with the company. [source: Reuters]

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

We really couldn’t deny that quite a number of Audi customers and would-be-buyers are intently waiting for higher performance RS versions of the Audi A4 and A5. Of course, these...
by - January 17, 2017
The Chevrolet Cruze is coming to Australia. But it won’t be known as the Chevrolet Cruze. Instead, it will bear the Holden badge and get the Astra moniker. The 2017...
by - January 17, 2017
As expected, four years after the current generation of the BMW 4 Series was introduced in 2013 with the BMW 4 Series Coupe, the German premium carmaker is implementing a...
by - January 17, 2017
As BMW continues to pursue its plans for the coming years, President-elect Donald Trump gave out a warning to car manufacturers to prevent them from exporting their cars to the...
by - January 17, 2017
Audi recently unveiled its Q8 full-size coupe SUV concept at the 2017 North American International Auto Show. Bearing the traditional functionality of an SUV and the sexy and sporty styling...
by - January 17, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries