WASHINGTON May 21 Fiat Chrysler Automobiles
wants to eliminate the two-tier wage system that pays
new U.S. automotive workers a lower rate than veterans by
gradually phasing out the higher scale as older workers leave
the company, Chief Executive Sergio Marchionne said on
The automaker's Chrysler unit and U.S. rivals General Motors
Co and Ford Motor Co are scheduled to negotiate
their next labor deals with the United Auto Workers union next
year, but Marchionne said at a conference in Washington that he
wants to open talks this year.
UAW officials have said they hate the two-tier wage system
and want to eliminate it over time. Norwood Jewell, nominated to
serve as a vice president when the union meets in June to ratify
its new leaders, said last December the current system was a
"financial unfortunate" caused by industry weakness in 2007, but
that the stronger economy now should help the union's case in
the next round of talks.
Pay of hourly workers at the entry level starts at just
under $16 an hour and rises over time to more than $19. Veteran
workers are paid just more than $28 an hour. The American
automakers have said they need the entry-level wage scale to
compete on labor costs with Japanese, South Korean and German
automakers that have U.S. plants.
A UAW spokeswoman could not be reached to comment.
Marchionne, who called the two-tier wage system his "biggest
problem," credited the UAW with increased flexibility over the
last several years. However, he said he hoped the U.S. union
would not argue that the shift should be to the higher level of
pay for all workers.
"The way you do this is you grandfather the Tier 1s,"
Marchionne said of the veteran workers. "You make them a dying
class and you build a Tier 2 structure that sets the wage
mechanism for the next generation.
"When you have a bumper year, you pay them as much as a Tier
1 would make if not more," he added of the lower-tier wage
scale. "But if I'm in the toilet because the markets are down or
GM is successful, or Ford, and then we go down in earnings, then
I think at the end of the day you share the pain with the
Marchionne referred to Dennis Williams, who is the choice to
be the UAW's next leader, and said he wants to "start the
discussions right now, a year before the contract is up."
(Additional reporting by Ben Klayman in Detroit; Editing by