In a rare move, Fiat Chrysler’s 40,000 workers appear to have rejected a new labor contract in a voting process that was to end Wednesday, taking a stand against a pact many said failed to return what they sacrificed during the Detroit Three automakers’ darkest days.
Those rejecting the accord included Brian Keller, and he didn’t suffer nearly as much as others.
After leaving the Navy, he got hired at Chrysler as a housekeeper in 1999, right after a merger with Daimler had sent market expectations soaring. Even when the company’s fortunes declined and it outsourced its housekeeping work in 2007, Keller got another job picking parts at Mopar, a Chrysler subsidiary.
Now, he makes $28 an hour — about $9 more than most people hired after the United Auto Workers agreed to a lower rate for new recruits, as part of an effort to help the company weather bankruptcy and emerge healthy on the other side.
Keller expected the reductions to be temporary, and for the union to negotiate a return to equal pay for equal work. The division is unhealthy, even for those in the privileged “Tier 1,” he said.
“It’s demeaning,” Keller said. “You got people who are working side by side with you who are working half what you make, and can’t even afford the product that they build. It makes it hard for them.”
That’s partly why he campaigned against the union’s tentative contract with Fiat Chrysler of America — and why the rest of the membership apparently agreed, voting down the proposal by a wide margin. That means the union could go back to the bargaining table with Chrysler, or take a break and turn to negotiations at GM or Ford. Members also could decide to mount the auto industry’s first strike in 17 years. The UAW’s leadership and Fiat Chrysler had yet to outline next steps as both sides awaited a final tally late Wednesday afternoon.
The new contract marked an improvement over the ones the UAW accepted in 2007 and 2011, when Fiat Chrysler was still in a weakened state. The latest proposal raised wages for all workers, strengthen profit sharing, and provide for additional performance bonuses, among other benefits.
For many workers, that was enough. Local 1302 in Kokomo, Ind. was one of the few to approve the contract — because it’s mostly full of salaried nurses, engineers, and technical workers who have a substantially different agreement.
“Beauty’s in the eye of the beholder,” says Local 1302 President George Maus. “I think it does depend on how it applies to you.”
But hourly workers are still frustrated that the contract doesn’t completely eliminate the gap between Tier 1 and Tier 2 workers, who will still make less money at the end of four years. It also doesn’t reinstate the 25 percent cap on the number of workers who could be in that lower tier, as the 2011 contract had promised; 45 percent of Fiat Chrysler workers now make less than the old-timers. Mopar workers would be at an even lower tier, with newer hires topping out at $22 an hour.
“Everybody sits there saying, 'You know what you signed up for,’” Keller says. “Nobody ever thought when they got hired that they’d be stuck at $22 for the next 20 years. The international promised that they’d have a way to move up.”
In defending the contract, the union’s leaders have said that lower-paid workers will continue to move up; they just didn’t manage to close the gap entirely over the course of this contract. But judging what’s a fair share for workers in the auto industry is tricky — there’s no simple way of measuring how much they should get back in fatter times, says Harry Katz, a professor of labor relations at Cornell.
“The companies are doing better. So now the question is both, what do the workers want, and do they have the bargaining power to get it?” Katz says. “There’s no objective answer, it’s all just a question of power.”
Power is a complicated formula. It comes from some combination of public support, membership resolve, the size of the union's strike fund, and how easy it is for companies to move the work somewhere else.
That last part is a big factor — the Big Three automakers have sent some product lines to Mexico in recent years, chasing lower labor costs for lower-margin vehicles. While Ford and GM are doing better than Fiat-Chrysler, and the UAW has said it expects to negotiate more generous deals with those companies, non-union foreign automakers in the American South are a constant source of pressure for all of them.
"This is a very challenging negotiation year for all parties,” says Joel Cutcher-Gershenfeld, a professor of labor and employment at the University of Illinois. "Even though the companies have seen a few years of profitability, the competitive challenges in the marketplace remain."
In talking about the new contract, the UAW’s leadership explained that it’s trying to contain rising healthcare costs through a new coop shared across the membership of the Detroit Three automakers that will negotiate better prices with hospitals for certain procedures.
"It’s a mechanism to use collective numbers to study innovative ways to improve health care and maintain quality without passing costs," says UAW president Dennis Williams.
But the healthcare proposal wasn’t well explained in the contract summary, and after new approaches to healthcare ended up cutting benefits in previous contracts, members suspect this one as well. Meanwhile, headlines about surging profits feed their desire for a return to the compensation and benefits they remember.
“When you’re seeing the CEO making $72 million, how do you justify that, compared to what we make?” Keller says. “When we see a company making record profits, and we gave up so much in bankruptcy during the company’s darkest days, it’s only fair that they come back with something better.”
Opposition has been easier to foment in recent years, as information has flown around on social media about rallies and local plant votes. Keller maintains a Facebook page that serves as a water cooler for those dissatisfied with the proposed contract.
And this time around, the union is under additional pressure to deliver a satisfying outcome: Indiana and Michigan have gone right-to-work since its last contract was signed, and workers are free to stop paying dues when it expires, although they will still be entitled to all the benefits the union negotiates. That’s why some commentators predicted that the UAW would probably strike: The union would rather do as much as it could to get a better deal than leave a large percentage of its membership dissatisfied.
"Nobody wants to go on strike. That’s the reality,” Keller says. "But it needs to be done."
For his part, Keller believes in the value of the union; it’s helped him raise a 12-year-old and a 20-year-old in the small town of Mount Clemens, Michigan, near where he grew up.
"I wouldn’t opt out. That’s what the companies want. Their goal is to pull down the unions,” he says. “But it doesn’t help that we don’t have a union that represents the membership.”