Fiat Chrysler New Workers Will Hit $29 An Hour

(RTTNews) - A proposed tentative four-year agreement between automaker Fiat Chrysler Automobiles NV (FCAU) and the United Auto Workers union will eliminate a much-hated two-tier pay structure and also enable new workers to receive wages at par with their senior colleagues within eight years, reports said.

FCA US LLC, owned by Fiat Chrysler, confirmed that it has reached a new tentative agreement with the United Auto Workers union or UAW, but it did not want discuss the specifics of the deal pending a vote by UAW members.

Under the new proposal, the top wage for second-tier workers would increase to $29 per hour, a 53 percent increase from $19.28 per hour. This would enable them to receive wages at par with their senior colleagues.

A previous proposal that was reached on September 15 would have increased the base wage for entry-level workers to $25.35 per hour over a period of four years, but that agreement was rejected by a 2-to-1 margin after workers insisted that the gap between entry-level and first-tier employees be eliminated.

Under the new agreement, workers hired before 2007 will continue to receive 3 percent wage increases in the first and third years, with lump-sum payments in the second and fourth years of the contract. All workers will get a $3,000 signing bonus after the ratification of the agreement.

The latest agreement was reached just ahead of the Wednesday-night deadline, averting a potential strike at the automaker by 40,000 UAW workers. The strike would have been the first at a U.S. automaker since 2007.

About 45 percent of Fiat Chrysler's 40,000 UAW workers are second-tier and were hired after the two-tier pay structure went into effect in 2007 when the Big Three automakers were in financial trouble.