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

Article by Christian A., 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

Recommended

Imagine a sports car morphing into an SUV. Chevrolet initially revealed the FNR Concept at the previous Shanghai Auto Show in 2015. For this year, Chevy once again graces the...
by - April 22, 2017
From the moment FCA kicked off with its 3-month-long ad campaign until the day it unveiled the new Dodge Challenger SRT Demon, folks have been guessing what the exact figures...
by - April 22, 2017
Some people may think Audi Sport is a new company but it is in fact the motorsport division of Audi combined with the best of what Quattro GmbH can offer....
by - April 21, 2017
It is not a big secret that premium customers in China have a strong penchant for luxury cars with a spacious interior. In particular, premium customers in China purchase luxury...
by - April 21, 2017
Chinese automaker Chery did not leave a good impression last time they were in Australia - due to its cheap design. But this year, Chery showcases its new Tiggo Sport...
by - April 21, 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