* Company $5.3 bln investment same as in rejected proposal
* New hires would get $29 per hour in 8 years
* Starting pay same as in rejected proposal, $17/hour
By Bernie Woodall and Nick Carey
DETROIT/KOKOMO, Ind., Oct 8 (Reuters) - The latest proposed
four-year contract for Fiat Chrysler Automobiles (NYSE:FCAU) NV's U.S.
unionized workers would over time eliminate the much-maligned
two-tier pay structure, allowing new hires to reach top pay
within eight years, sources said.
The proposal agreed by United Auto Workers and Fiat Chrysler
FCAU.N FCHA.MI negotiators late Wednesday night would also
increase the top pay for some second-tier workers to $29 in the
course of the agreement, up from their current pay of about $19
per hour, sources said. That would also be up from about $25 top
pay for second-tier workers that was in the proposed contract
rejected last month by a nearly 2-to-1 margin.
The failure of the first agreement led the UAW to threaten a
strike against Fiat Chrysler, which was to begin Wednesday at
one minute before midnight eastern time. That would have been
the first stoppage at a U.S. automaker since 2007.
There is no cap on the percentage of second-tier workers in
the new deal. If one had been enacted, that could have created a
permanent second tier while raising some to first-tier pay
level, analysts said.
The sources would not say whether the company put more money
on the table or if the same amount of spending in the previous
agreement was reshaped.
Alston Horner, a 25-year-old second-tier worker at the
Kokomo Transmission Plant in Indiana, said on Thursday he will
have to wait to learn the details from his local union leaders
before he can offer support of the new proposal.
"That $29 sounds good, but the company just doesn't hand you
something without taking something away somewhere else," said
Horner. "And I still think it takes too long to get to the top.
Eight years? That's more than one contract. How do we know they
are going to keep that promise for more than one contract?"
Second-tier workers with some tenure will get to the top pay
during the four years of the contract. For instance, a five-year
veteran who makes the lower tier of pay would reach the new top
pay in three years, the sources said.
All sources wished to remain anonymous because they are not
authorized to speak publicly.
About 45 percent of Fiat Chrysler's 40,000 UAW workers are
second-tier. Those second tier workers were hired since the
two-tier pay system went into effect in 2007 when all three of
the Detroit automakers were struggling financially.
The pay proposals for the first-tier of UAW Fiat Chrysler
workers remained the same as in the recently rejected contract,
which is 3 percent raises in years one, and 3- and 4-percent
lump sum payments in years two and four, the sources said.
The UAW and the company declined to comment on the proposed
contract, which will be presented to UAW local leaders on Friday
and if approved then will go to a ratification vote of all Fiat
Chrysler UAW members. urn:newsml:reuters.com:*:nL1N1270Y5
The UAW issued a statement on social media Thursday saying,
"Preliminary media reports of a proposed tentative agreement are
incomplete" and said fuller details will come after Friday's
meeting.
SKEPTICS, CONCERNS
Workers outside the gates of one of the four Kokomo Fiat
Chrysler plants greeted news early on Thursday of a new
tentative agreement skeptically, giving an indication of the
challenges the union may face in getting the deal ratified by
members. urn:newsml:reuters.com:*:nL1N1281LD
The rejection vote at UAW Local 685 in Kokomo was even more
pronounced than the national tally, as "no" votes among
production workers prevailed by a margin of 2,555 to 723.
"When you have people working side by side doing the same
job for different wages, it causes tensions," said Lakeysha
Woodare, 41, a first-tier worker making $28 an hour who voted
against the first contract.
UAW President Dennis Williams, said in a statement, "We
heard from our members, and went back to FCA to strengthen their
contract," which, he said he believes "addresses our members'
principal concerns about their jobs and their futures."
While the new proposal does not spell out product placement
at each of Fiat Chrysler's U.S. plants, the company presented
the union with a document that a source said offers more clarity
on the expected workforce at each plant, in hopes of alleviating
fears that jobs will be lost.
Fiat Chrysler maintained in the new deal its pledge to
invest $5.3 billion in its U.S. operations, unless market
conditions worsen.
The two-tier structure was put in place so the Detroit
Three, which includes General Motors Co (NYSE:GM) GM.N and Ford Motor (NYSE:F) Co
F.N , would remain competitive on labor costs with nonunion
Japanese, German and South Korean automakers with U.S. plants.
A ratification bonus of $3,000 remains the same in the newly
proposed contract, sources said.
A profit-sharing plan linked to the company's North American
financial performance is changed from the first proposal by
eliminating richer payouts to second-tier workers, due to the
newer $29 per hour top pay, sources said.
The rise in pay for the second tier of workers was reported
earlier on Thursday by Bloomberg News.
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GRAPHIC LINK ON BIG THREE http://link.reuters.com/tuh65w
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(Editing by Bernard Orr)