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A closer look at the details of the tentative Chrysler-UAW agreement

Yesterday, the Chrysler Group and negotiators from the United Auto Workers union came to an agreement on a tentative 4-year contract that included $4.5 billion in American investments along with adding/retaining around 2,100 jobs in the US.

While the majority of news sources focused on the aforementioned key points that relate the greatest to the best interest of the American workers, the fine details reveal more about the pending 4-year labor contract between Chrysler and the UAW.

First off all current Chrysler UAW members will receive a $3,500 signing bonus while is smaller than the signing bonuses for GM and Ford workers but Chrysler is also quite a bit smaller than the other Detroit automakers. This will be paid in two parts, the first half coming immediately while the rest is paid when the company reaches financial stability – with the explanation of financial stability to be disclosed at a later date.

Next, Chrysler UAW workers will receive $1,000 a year in annual bonuses provided that various performance and quality measures are met. Those measures are stated to be based on "world class manufacturing metrics” which, like the definition of financial stability, will be decided upon at a later date between Chrysler and UAW management. Workers will also stand to benefit from an annual profit sharing plan which includes contributions by the company to the UAW retiree health care fund.

The last point of the new Chrysler-UAW plan related to employee benefits is another item similar to the details of the GM-UAW plan, as Chrysler has agreed to raise the minimum wage for their entry level “Tier 2” workers. The entry level pay for Chrysler UAW workers will rise from the current price of $14/hour to $15.78/hr with a steady increase each of the next four years before topping out at $19.28. General Motors workers also now start at $15.78 under the newly ratified contract and like Chrysler, the pay cap for Tier 2 workers for GM is $19.28 – impressive for Chrysler considering that GM is much larger and more profitable. Tier 2 Chrysler UAW workers will also receive tuition assistance which was not offered under the expiring contract and Chrysler has set a cap at 25% of their total UAW membership to be in Tier 2 and once they surpass the 25% mark, employees on the upper end will automatically receive the same wages as tenured Chrysler workers. Click here for a closer look at the specific terms of the new GM-UAW labor contract.

Finally, the new 4-year deal between Chrysler and the UAW outlines $4.5 billion in investments to various assembly and production plants around the United States. Those investments include the following details:
-The Belvedere Assembly Plant in Illinois will receive around $600 million to retool for the new model year of the Jeep Patriot and Jeep Compass along with a new small vehicle – likely whatever replaces the Dodge Caliber. That vehicle is expected to be unveiled at the 2012 Detroit Auto Show and it will be based on the architecture of the current Alfa Romeo Giulietta. This investment is expected to retain around 2,400 American jobs.

-The Sterling Heights Assembly Plant in Michigan will receive around $850 million for plant improvements and retooling to help continue to produce the current lifecycle of the Dodge Avenger and Chrysler 200 models along with a new vehicle in the near future. Rumors suggest that this new vehicle could also be based on an Alfa Romeo model. This portion of the investment will help to retain around 2,200 American jobs.

-The Kokomo Transmission Plant in Indiana will receive roughly $1.3 billion to prepare the facility to build Chrysler’s new 8-speed and 9-speed automatic transmissions along with continuing the current production of transmissions already in use. This will help to procure around 3,500 jobs.

-The GEMA Engine Plant in Dundee Michigan will receive around $300 million in general plant improvements which will help to retain around 350 jobs. The Dundee plant currently builds the 4-cylidner engine that is found in models like the Chrysler 200 and the Dodge Avenger alongside the new 4-cylinder MultiAir engine found in the Fiat 500.

-The Toledo Machine Plant in Ohio, which machines a variety of vehicle components, will receive around $100 million in general improvements to help retain about 55 jobs.

-The Trenton North Engine Plant in Michigan will receive around $100 for general plant improvements over the next few years. The Trenton plant current builds the 3.6L Pentastar V6 that is found under the hood of almost every vehicle that Chrysler presently sells. This will help to create around 250 new jobs.

Finally, Chrysler pledged to invest an addition $1.3 billion at various facilities around the United States with a retention of roughly 1,000 jobs stemming from this final portion of the $4.5 billion in investments while also generating an addition 1,850 new jobs.

There is speculation that the Chrysler UAW workers will not vote to ratify this new agreement which will send the UAW management back into negotiations with Chrysler but unlike the disgruntled Ford workers, Chrysler Group workers do not have the ability to strike due to an agreement with the government during the 2008 government bailout. While the terms of this new Chrysler-UAW labor agreement might not shell out the same kind of bonuses as those seen by the GM workers who voted to ratify their new contract, but Chrysler is not as big nor as profitable as General Motors so it is unrealistic to expect workers to receive the same large bonuses. However, Chrysler has equaled the pay for entry level workers at GM, helping to improve the quality of life for those who are getting into these newly created jobs around the US.

The new Chrysler-UAW contract is currently making its rounds to the various UAW local branches around the United States, where the individual workers will vote on whether or not to approve this new labor contract. TorqueNews will continue covering the proceedings of the UAW contract talks, bringing you any news as it becomes available.

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Chrysler leads the nation in September growth, bests Toyota in sales
The 2012 Ram 1500 Tradesman is the most powerful truck in the segment
The first Italian-built Chrysler production models unveiled
Jeep Liberty under NHTSA investigation for airbag risks
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Michael (not verified)    October 14, 2011 - 1:56PM

I have read reports that Chrysler CEO Sergio Marchionne has been "successful in eliminating the 25% hiring cap on Tier 2 workers" yet I have read other reports that the UAW has retained the cap. So which is it? Is their a hiring cap at Chrysler or not?

robert tedder (not verified)    August 11, 2016 - 2:43PM

in 2008 i retred with full benifits 6 months later no christmas payment ,no dental, no vison no representation by union i could not even vote on a contract i retired from how communist is that then they take away my pension even what you are never to lose becauase i fought like hell to get itmy disabillity the last 3 months of 30 yrs and you let obama take my living away thanks to who came before you traders