The seriousness of this year’s UAW contract negotiations with Fiat Chrysler just got more so.
FCA CEO Sergio Marchionne plans to attend the ceremonial handshake with UAW President Dennis Williams and their entourages when they formally open bargaining Tuesday in Detroit.
The current four-year contracts between the Detroit 3 and UAW expire Sept. 14.
FCA has the most to lose in this year’s bargaining. That’s because FCA is financially weaker than Ford and General Motors, and the UAW has vowed to improve wages for entry-level Tier 2 workers in this round of talks.
FCA’s hourly workforce of 38,000 is about 45 percent Tier 2 compared with 28 percent at Ford and 19 percent at GM. That means any increase in Tier 2 wages, either through a straight raise or creation of a phased path to full wages, will hit FCA particularly hard.
Marchionne is philosophically opposed to a two-tier workforce that pays lower-seniority workers less than veteran ones for doing the same jobs. But he certainly has shown no willingness or desire to eliminate Tier 2 by raising pay rates to Tier 1 levels in one fell swoop.
An FCA spokeswoman said people shouldn’t read anything into Marchionne’s attendance at the handshake. She noted that GM CEO Mary Barra has pledged to be involved more in this year’s bargaining.
But Marchionne’s participation will definitely backstop his new lead negotiator Glenn Shagena, who enters the fray at the eleventh hour because of the sudden retirement last month of longtime negotiator Al Iacobelli, 55.
The FCA handshake ceremony in 2011 was a laid-back affair with Iacobelli and FCA executive Scott Garberding wearing maroon windbreakers and black slacks matching those worn by then UAW President Bob King and the late General Holiefield of the union. Marchionne was not there.
At the time, King was closely managing the expectations of his rank-and-file against any wage increases. The union also was unable to strike FCA or GM stemming from concessions in 2009.
This year is different. Tier 1 workers who haven’t had a wage increase in 10 years demand one this time around. And Williams has promised improvements for Tier 2.
Marchionne is claiming his front-row seat to the negotiations early.