* UAW Chrysler Council will meet on Friday to vote on
agreement
* Tentative contract was rejected by union members last week
* Talks went down to the midnight deadline
(Adds reaction to tentative deal, UAW member comments,
background)
By Bernie Woodall and Nick Carey
DETROIT/KOKOMO, Ind., Oct 8 (Reuters) - Fiat Chrysler (NYSE:FCAU)
Automobiles NV FCAU.N FCHA.MI and the United Auto Workers
said on Thursday they had reached a new tentative four-year
labor agreement that averted a threatened strike of the
automaker's U.S. operations.
The agreement must be ratified by a vote of Fiat Chrysler's
40,000 union workers in the United States. A previous proposed
contract was rejected by rank and file UAW workers at Fiat
Chrysler in voting late last month.
Carl Durham, 45, a UAW worker at Fiat Chrysler's
transmission plant in Kokomo, Ind., said his support for the new
contract would depend on whether it did more than the previous
deal to narrow or eliminate the roughly $9-an-hour gap in pay
between veteran workers and more recent hires. He said he voted
against the previous agreement.
"I want to know all the details and what everyone is going
to get, not a lot of ifs," he said.
Neither the union nor the company disclosed details of the
new tentative pact. It's not clear whether Fiat Chrysler will
spend more than it would have under the proposal it offered the
UAW last month.
Workers have said they turned down the previous contract
because many wanted a two-tier wage and benefit system
eliminated. Short of that, they sought a cap on that lower-paid
second tier at 25 percent of the total union workforce. Many
workers also wish to undo some of the concessions they have
given since 2007 to keep the company competitive.
If this agreement is ratified, the UAW will try to use the
pact as a template for negotiations with the U.S. operations of
General Motors Co (NYSE:GM) GM.N and Ford Motor (NYSE:F) Co F.N .
The UAW Chrysler Council will meet in Detroit at 11 am
EDT/1600 GMT on Friday to discuss the agreement and vote on it,
the union said.
The previous proposed agreement would have narrowed the gap
between the pay of veteran UAW workers, who earn about $28 an
hour, and more recent hires, who are paid about $19 an hour.
This two-tier wage system, which the UAW agreed to in stages
over the past decade as the Detroit automakers grappled with
grave financial losses, has become a focus of discontent among
many UAW members who want all workers to be paid the top tier
wage.
Aaron McCune, 21, a recent hire at the Kokomo complex who
makes $15.78 an hour, said he was concerned the previous
proposed contract was unclear, especially about health
insurance. "But I have a family to feed and I can't get by
without a job. I would have gone on strike, but I'm happy I get
to keep on working," he said early Thursday.
The previous agreement was opposed by 65 percent of Fiat
Chrysler's UAW workers, even though the company promised $5.3
billion in investment in UAW-represented plants during the
four-year life of the contract. UAW workers said the investment
promises were not specific, and also questioned proposed changes
to their healthcare plans.
The UAW's decision, for the second time, to try to avoid a
strike at Fiat Chrysler highlights the continued threat to UAW
jobs, despite the robust recovery of the U.S. automakers since
the financial crisis of 2008-2009. The sudden collapse in U.S.
auto sales during that period forced the former Chrysler and GM
into government-funded bankruptcies, while Ford undertook a
painful, self-financed restructuring.
Now, the Detroit automakers are making strong profits,
though Fiat Chrysler's U.S. operations are the weakest
financially of the Detroit Three. Further, the UAW remains under
pressure from the threat that the automakers could move more
jobs to lower cost Mexico or overseas. Fiat Chrysler and Ford
have both signaled plans to shift production of certain models
to Mexico, UAW members have said.
U.S. labor unions have launched fewer than 20 major strikes
in each year from 2008 to 2014, according to the U.S. Labor
Department. In 1979, U.S. unions launched 235 major strikes. The
number of strikes started to fall dramatically after 1981, when
then-President Ronald Reagan fired U.S. air traffic controllers
who had gone on strike. During the subsequent years, U.S.
companies moved to relocate jobs overseas or to states with weak
unions.