* UAW, Chrysler discussing "second-tier" wage increases
* One proposal lifts wages to $16-$18 an hour -
* Chrysler CEO may be involved as soon as this weekend
(Adds analyst comment, background on two-tier wage scale, labor
costs at U.S. plants run by foreign automakers)
By Deepa Seetharaman and Bernie Woodall
DETROIT, Sept 8 Chrysler Group LLC and the
United Auto Workers union are discussing a plan that would lift
the base wages of entry-level workers at the No. 3. U.S.
automaker over time, two people involved in the talks said.
The development comes as Fiat-controlled Chrysler and the
UAW make progress toward a new contract with less than a week
before expiration of the current four-year deal on wages and
benefits on Sept. 14.
Chrysler CEO Sergio Marchionne could be involved in the
contract talks as soon as the weekend, one of the sources said.
That would follow a meeting earlier this week between UAW
President Bob King and General Motors Co CEO Dan Akerson.
Detroit automakers want to hold down fixed costs and instead
offer workers profit-sharing and other bonuses, rather than the
annual pay hikes that have been a staple of UAW contracts for
The UAW in return wants the companies to commit to making
more vehicles in the United States, which would create jobs in
an industry that has shed them steadily over the past decade.
But increases in wages for "second-tier" workers is also a
key issue for the union. King said last week that winning those
increases has been the union's top priority in the current round
of contract talks.
The union has fast-tracked talks with GM and Chrysler, while
progress has been slower at Ford Motor Co , people involved
in the talks have said.
Of Detroit's three automakers, Chrysler by far has the
highest level of entry-level -- or second-tier -- workers, who
start at $14.89 an hour, about half the hourly wage of a veteran
Chrysler, which is controlled by Italian automaker Fiat SpA
, has proposed "two to three" models for boosting those
wages over time, one of the sources said.
The other source said Chrysler has proposed to increase
wages to between $16 and $18 an hour.
Any deal would have to be ratified by the union's rank and
file, but the UAW gave up the right to strike Chrysler under the
terms of the automaker's 2009 federal bailout.
Chrysler declined to comment and the union could not be
immediately reached. The sources asked not to be named because
the contract talks remain private.
A MOVING TARGET
Harley Shaiken, a labor professor at the University of
California-Berkeley, said the specific dollar figure for any
second-tier wage hike is a moving target.
"At this stage of the talks, the numbers at 5 pm are not
necessarily the numbers at 7:30," Shaiken said.
The high end of the $16 to $18 scale would represent a wage
increase of more than 20 percent, but stops short of the $19.50
an hour that Volkswagen AG's (VOWG_p.DE) workers in Chattanooga,
Tennessee can make after three years on the job.
The UAW has set a target of organizing workers at the newly
opened VW plant and other assembly plants operated by Japanese
and Korean automakers once the round of negotiations with U.S.
automakers is complete.
Automakers negotiated a two-tier pay scale for workers
during the 2007 contract talks.
The companies said they needed the lower wage to bring down
their average compensation costs to compete with Asian
automakers operating auto plants without union representation,
mainly in the southern United States.
King has faced grassroots clamor from workers who say the
union went too far in allowing the Detroit automakers to hire
thousands of workers at the second-tier level of about $30,000 a
year, compared with about $58,000 for established workers,
About 12 percent of Chrysler's 22,800 union-represented
workers make the lower second-tier wage.
By contrast, workers at an equivalent wage make up only
about 5 percent of workers at GM. At Ford, about 6 percent of
workers make that lower wage.
(Reporting by Deepa Seetharaman and Bernie Woodall, editing by
Bernard Orr and Vinu Pilakkott)