Fiat Chrysler work schedules helped kill UAW deal

 

DETROIT — Frustration with a type of work schedule that some describe as inhuman — when employees work four, 10-hour shifts per week and switch from late-night shifts to predawn starts within a few days — contributed heavily to the rejection of a UAW labor deal last week.

“Alternative work schedules,” as they are called at Fiat Chrysler Automobiles, have become increasingly common across the auto industry because they let plants keep the line running for four extra hours per day without paying significant overtime.

“It deprives people of sleep and damages their health,” said John Klik, who retired a year and a half ago from the Warren Stamping Plant. “Anyone with a young family is screwed. It’s not a life. It’s an existence.”

USA TODAY

UAW threatens strike at Fiat Chrysler

The UAW’s tentative deal with Fiat Chrysler was rejected last week with 65% of Fiat Chrysler union members voting it down. Workers cited entry-level pay, but the work schedule issue has been bubbling for some time, and workers had been looking for more relief.

“It is physiologically more stressful and sociologically more stressful.”

Bill Davis, vice president of operations at Circadian

Under the Fiat Chrysler alternative schedule, plants churn out cars or trucks 20 hours per day, instead of the usual 16, and few workers (if any) earn overtime, even if they work on a Saturday.

The labor agreement would have provided for paying time and a quarter for Saturday hours. But most workers want regular eight-hour shifts with more traditional opportunities for overtime.

“I did it for four and half months, and it’s depressing,” said Tim Manriquez, a skilled-trades worker at a Kokomo, Ind., transmission plant. “After 10 hours, by the time you get home, everything is closed. It’s hard to get anything done outside work.”

What would Manriquez propose?

“Go back to five, eight-hour days. That’s what everyone wants,” he said.

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That takes out the four extra hours of output and raises the possibility that some workers will put in overtime when sales are strong.

“I did it for four and half months, and it’s depressing.”

Tim Manriquez, a skilled-trades worker at a Kokomo, Ind., transmission plant

Much like the two-tier wage structure the UAW agreed to when the automakers were on the brink of failure in 2009, the alternative work schedules were sold as a way to keep production and jobs in the U.S. Now, both concessions are hard to undo.

Fiat Chrysler has been using alternative schedules since 2011, when sales of Ram pickups and Jeep SUVs began rising. That year’s labor contract enabled the UAW’s vice president for the Chrysler department, then General Holiefield, to approve the details of shift schedules.

General Motors uses a range of work schedules, but it currently has no plants where any one shift swings from days to nights in the same week, according to a company spokesman.

Ford uses variations of Fiat Chrysler's schedule, but gauging the level of discontent over it is difficult because Ford is not as far along in its UAW negotiations this year.

USA TODAY

UAW, Fiat officials miscalculated young worker angst

Gary Walkowicz, bargaining chairman at Local 600, which represents workers at Ford’s Dearborn Truck Plant, said schedules aren’t the first issue workers bring up when discussing what they want in a new agreement, perhaps because the 10-hour shifts have been in place longer. “But if you bring it up, they will say they don’t like it,” he said of Ford’s schedule, in which one crew works shifts between days and nights, working Monday night, then Friday and Saturday days and then Sunday night.

“It’s how it disrupts your life. It is not a humane way to work and not a healthy way to live,” Walkowicz said. “More compensation doesn’t fix it,” he said of the Fiat Chrysler agreement that provides double time for Sundays.

USA TODAY

UAW votes down Fiat Chrysler contract

A recent Harvard Medical School study that found a quarter of all U.S. workers have insomnia, costing U.S. employers $63 billion in lost productivity each year.

“Studies have indicated that those (who) work across (the) night shift do have higher incident of cardiovascular disease. It is physiologically more stressful and sociologically more stressful,” said Bill Davis, vice president of operations at Circadian, a company that advises companies that run production and deliver services on a 24/7 basis.

Some have tied this type of worker issue to lowered product quality, including increased recalls of vehicles, but there is no research that shows alternative work schedules are causing increased quality problems.

“The company would have data that sheds light on that issue,” said Peter Berg, professor of employment relations at Michigan State University's School of Human Resources and Labor Relations. While the schedules help increase production, Berg said the union might want to ask for evidence that savings from not paying overtime exceeds the cost of quality and safety recalls.

Contributing: Alisa Priddle, Detroit Free Press

Warren Stamping Plant

A Shift: 6:30 a.m. to 4:30 p.m. Monday to Thursday

B Shift: 4:30 p.m. to 2:30 a.m. Wednesday to Saturday

C Shift: 4:30 p.m. to 2:30 a.m. Monday and Tuesday; off Wednesday and Thursday, then 6:30 a.m. to 4:30 p.m. Friday and Saturday

Kokomo Transmission

A Shift: 6 a.m. to 4:30 p.m. Monday to Thursday

B Shift: 4:30 p.m. to 3 a,m. Wednesday to Saturday

C Shift: 7:30 p.m. to 6 a.m. Sunday, and Monday into Tuesday; off Wednesday and Thursday, then 6:30 a.m. to 2:30 p.m. Friday and Saturday

Fiat Chrysler work schedules helped kill UAW deal

Auto workers and automakers on a collision course - Oct. 2, 2015

 

Seven years of relative labor peace in the auto industry may be about to end.

Members of the United Auto Workers union are prepared to go on strike at noon Sunday at a Ford plant outside of Kansas City that builds the best-selling F-150 pickup, if it can't reach a deal with management on working conditions there.

And the 40,000 UAW members at Fiat Chrysler have voted down a tentative labor deal with the automaker by nearly a two-to-one margin. The union hasn't said what it will do next at Fiat Chrysler, but a strike is a possibility there as well.

There hasn't been a strike in the auto industry since 2007, when there were brief walk-outs at both General Motors (GM) and Chrysler. The Chrysler strike was so brief it lasted less than an entire shift.

But the strike threats show that there is frustration among the rank-and-file factory workers.

The veteran workers have gone a decade without a raise, and have seen their job protections disappear. The new workers -- anyone that's been hired since 2007 -- are paid at a lower hourly wage. They also don't get the pensions and retiree health care that veterans do. About 45% of the factory workers at Fiat Chrysler (FCAU) are the so-called tier two workers who are paid less.

Related: Here's what autoworkers want in new contract

While the tentative deal that was rejected closed some of that gap, it did not eliminate the second tier of workers. It also didn't call for any limits on how many workers could be paid at the lower tier. At GM and Ford (F) only 25% of the staff can be paid at that lower level. Once that percentage is reached, some of the new hires get promoted to the top tier of pay.

The industry is far healthier than it was in 2007, when all three automakers suffering from shrinking U.S. sales and losing money. High labor costs at that time were a big part of the reason for the losses. Those losses ultimately sent Chrysler and GM into bankruptcy in 2009, and both required a federal bailout.

Today car sales are near record levels and profits are strong because automakers were able to reach much more competitive labor contracts. But the automakers say they can't afford to do everything the rank and file workers want and still remain competitive.

Related: U.S. auto industry doesn't need Donald Trump's help

"A large number of new employees ...thankfully did not have to endure the pain and sacrifices that were required of the workforce [in 2009]," said Fiat Chrysler in a statement after the deal was rejected. "But it is that knowledge and those memories that continuously reinforce the Fiat Chrysler's leadership's resolve to never let those events repeat

Auto workers and automakers on a collision course - Oct. 2, 2015

Auto workers president rejects lower-tier of wages - Yahoo Finance

 

The leader of the United Auto Workers union has rejected a third tier of lower wages for members who make auto parts.

Speaking Wednesday at the union's national bargaining convention in Detroit, President Dennis Williams said the UAW already has too many tiers of lower wages.

Williams was responding to reports that General Motors Co. and Ford Motor Co. may propose a third tier of pay. He already is under pressure from union members to end a second tier of wages that's about half the $28 per hour made by longtime workers.

He told delegates that he heard people talking about the third tier, which would pay less than the $15.28 starting wage for second-tier workers, on their way in to the convention center Wednesday morning.

"I'm thinking they got too many damn tiers now," said Williams, who received a standing ovation.

Actually, a third tier of wages already is in place at several General Motors factories in the Detroit area for a small number of workers who build battery packs and place parts in the right sequence to be assembled on cars. Without the lower tier, the work may have gone to Mexico or another country with lower labor costs.

Williams told members about bridging the gap in wages, an apparent reference to the first and second tiers. But he also said they're competing in a global economy.

Many at the convention spoke in favor of pay raises for veteran workers. Longtime UAW workers have not had an hourly pay raise since 2007, although they have received hefty annual profit sharing checks. But there's no guarantee of getting checks every year.

Williams didn't address pay raises in his speech, but has said in the past that there are ways to give raises and keep the companies competitive.

In his speech, he said workers shared in getting the auto companies through bad times and "we must equally share in the good times."

Contract talks with between Fiat Chrysler, GM, Ford and the UAW start this summer. The union represents about 137,000 workers at the three companies. The current contract expires in September.

The convention, which takes place every four years, sets the agenda for the union's bargaining efforts with the auto companies and other industries.

This year's talks are the first to come after the auto industry fully recovered from the Great Recession, and could be contentious as the union seeks a slice of the industry's billions of dollars in profits. Auto sales are expected to hit nearly 17 million in the U.S. this year, close to historic highs. They fell as low as 10.4 million in 2009.

Auto companies, mindful of the recession, are reluctant to increase U.S. labor costs and once again be at a cost disadvantage to foreign companies. They actually want to reduce labor expenses, contending that their costs already have grown above competitors.

An analysis done by the Center for Automotive Research, a think tank based in Ann Arbor, Michigan, shows that to be true, at least for General Motors and Ford.

GM's total hourly labor costs, including wages and benefits, total $58 per hour, followed closely by Ford at $57. Both are more than $8 above Honda and Toyota, whose costs are below $50 per hour, the analysis found. Chrysler, with costs totaling $48 per hour, is below Honda and equal to Toyota, but higher than Nissan, Hyundai, BMW and Volkswagen, according to the analysis.

Mercedes-Benz had the highest labor costs in the U.S. at $65 per hour, while Volkswagen was the lowest at $38.

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Auto workers president rejects lower-tier of wages - Yahoo Finance

GM, Ford to ask UAW for new lower-pay tier in U.S.: Bloomberg | Reuters

 

Reuters) - U.S. automakers General Motors Co (GM.N) and Ford Motor Co (F.N) are considering asking the United Auto Workers union to create a new tier of lower-paid union workers in their U.S. factories, Bloomberg reported citing people familiar with the matter.

The UAW currently has a two-tier wage system, that includes top-paid $28-an-hour assembly workers and the lower-paid second tier, whose wages top out at $19.28.

The automakers would be pushing forth for a third tier wage system for certain lower-skilled jobs, according to the report. (bloom.bg/1ImHJBP)

The new pay rate for these lower-skilled jobs would help the automakers bring down labor costs as they compete with Asian and European rivals that pay less at non-union U.S. plants, the report said.

GM and Ford have much higher labor costs than their cross-town rival Fiat Chrysler Automobiles (FCHA.MI), according to a study released just ahead of a meeting of United Auto Workers officials as they prepare for contract talks with the Detroit Three.

GM's U.S. auto workers on average earn about 21 percent more in wages and benefits than their counterparts at Fiat Chrysler, reflecting the much higher percentage of lower-paid, entry-level workers at FCA, according to a study of 2014 labor costs by the Center for Automotive Research (CAR).

Ford's hourly labor costs were $57, just behind GM's at $58. FCA's U.S. workers averaged $48 per hour.

"We aren't going to comment on potential topics in upcoming negotiations... we are committed to working with our UAW partners on solutions that will benefit employees and improve GM's competitiveness," GM spokeswoman Katie McBride said in an email.

Ford was not immediately available for a comment. UAW could not be reached outside business hours.

(Reporting by Ankit Ajmera and Anjali Rao Koppala in Bengaluru; Editing by Bernard Orr and Anupama Dwivedi)

GM, Ford to ask UAW for new lower-pay tier in U.S.: Bloomberg | Reuters

US auto labor cost study shows impact of two-tier wage system - Yahoo Finance

 

DETROIT (Reuters) - General Motors Co <GM.N> and Ford Motor Co <F.N> have much higher labor costs than their cross-town rival Fiat Chrysler, according to a new study released just ahead of a meeting of United Auto Workers officials as they prepare for contract talks with the Detroit Three.

GM's <GM.N> U.S. auto workers on average earn about 21 percent more in wages and benefits than their counterparts at Fiat Chrysler Automobiles <FCAU.N> <FCHA.MI>, reflecting the much higher percentage of lower-paid, entry-level workers at FCA, according to a study of 2014 labor costs by the Center for Automotive Research (CAR).

Ford Motor Co's <F.N> hourly labor costs were $57, just behind GM's at $58. FCA's U.S. workers averaged $48 per hour.

The two-tiered pay scale implemented as part of the United Auto Workers 2007 labor agreement allows GM, Fiat Chrysler and Ford to pay their newer "entry-level" workers less than veteran ones. UAW leaders have said that narrowing the gap between new hires and veterans will be a top issue when negotiations begin with the Detroit automakers this summer.

Germany's Daimler AG <DAIGn.DE>, for its Mercedes-Benz plant in Alabama, at its only U.S. plant, has the highest U.S. auto labor costs, at an average of $65 an hour. Workers at the U.S. plants of Volkswagen AG <VOWG_p.DE> and BMW <BMWG.DE> earn the least, at $38 and $39 per hour, respectively, according to estimates by CAR.

GM, Ford and Fiat Chrysler are the only automakers whose U.S. workers are represented by the UAW.

Despite major restructuring since the 2009 recession, GM and Ford still have higher labor costs than their major competitors. The $10 per hour labor cost gap between GM and Toyota Motor Corp <7203.T> translates to roughly $250 a car in additional labor costs for GM, according to data in the study.

Some 43 percent of Fiat Chrysler's U.S. auto workers earn the lower entry-level wage, almost double the percentage of such workers at Ford and GM.

Of the other automakers operating in the United States, Honda Motor Co <7267.T> workers earned on average $49 per hour, Toyota Motor Corp <7203.T> $48, Nissan Motor Co <7201.T> $42, Hyundai Motor Co <005380.KS> and its corporate stablemate Kia Motors Corp <000270.KS> $41.

Per hour labor cost averages include pay for "temporary" workers who are formally employed by outside agencies such as Kelly Services Inc <KELYA.O> but mainly work full-time alongside workers employed directly by the automakers. Japanese automakers have the highest percentages of temporary workers, which cut labor costs, CAR analysts have said

US auto labor cost study shows impact of two-tier wage system - Yahoo Finance

News Flash: GM-UAW Agree on New Contract

The UAW announced the agreement just after 11 p.m. EDT Friday, after a little more than eight weeks of bargaining.

The contract covers 48,500 GM workers in the U.S. GM was the first of the Detroit Three to reach an agreement with the UAW. Chrysler Group and Ford Motor Co. are still negotiating.

The UAW says the contract improves health care benefits for workers and protects their retirement benefits. It also says there is an improved profit-sharing plan.

Read more of this story by clicking on the following:  http://www.nytimes.com/aponline/2011/09/16/business/AP-US-Autos-Contract-Talks.html?_r=1&hp

Ford, suppliers rev up hiring to build Explorers at Torrence Avenue plant |

 

1,200 new workers it will need to build the vehicle at its Torrence Avenue assembly plant when it starts production in the fourth quarter. The plant already employs about 1,400.

Another 423 jobs are being added at area suppliers, the company said.

Click on the following for more details:  Ford, suppliers rev up hiring to build Explorers at Torrence Avenue plant | Crain's Chicago Business

Daimler, Renault and Nissan Said Close to an Alliance - NYTimes.com

A good summary of the current situation of many alliances in the world auto/small truck industry. 

— Daimler, Renault and Nissan — are expected to announce an alliance as soon as Wednesday

Click on the following for more details:  Daimler, Renault and Nissan Said Close to an Alliance - NYTimes.com

US auto sales struggle to gain much ground; GM, Ford, Toyota are steady; Chrysler sags again

Sales were flat compared to last November, according to Autodata Corp. Even higher incentives couldn't push the needle much beyond the dismal lows seen a year ago, when a credit freeze and the financial meltdown kept car buyers at home.
Fuel-efficient cars showed continued strength, as did crossovers …. Truck sales were again weak.

Sales incentives rose 2 percent to $2,713 per vehicle

Chrysler continued to underperform the industry, selling only 63,560 vehicles last month, a decline of 25 percent. Chrysler's sales dropped 38 percent in the first 11 months of the year, steeper than the 24 percent drop for the industry overall. The automaker announced an array of sales incentives, including zero percent financing and cash rebates.  One good sign: Chrysler's market share rose to 8.4 percent from 7.9 percent in October, an indication that consumer have gained confidence in the company after getting details of its five-year business plan earlier this month.

Click on the following for more details:  US auto sales struggle to gain much ground; GM, Ford, Toyota are steady; Chrysler sags again -- chicagotribune.com

Caliber, Patriot shortages hurt Chrysler in Aug. - - BusinessRockford.com

 

the Caliber and Patriot were among the 10 most-bought vehicles through the program, which ended Aug. 24

in Belvidere, workers turned out just 2,153 vehicles total in May, June and July.

Click on the following for the rest of the story:  Caliber, Patriot shortages hurt Chrysler in Aug. - - BusinessRockford.com

Fire-sale prices don’t help Chrysler - - BusinessRockford.com

 

Fire-sale prices don’t help Chrysler - - BusinessRockford.com

Manzullo's Vehicle Voucher Bill Would Strengthen U.S. Auto Industry, End Need for Taxpayer Funding - Inbox - Yahoo! Mail

 

Click on the following for Mr. Manzullo’s news release:  Manzullo's Vehicle Voucher Bill Would Strengthen U.S. Auto Industry, End Need for Taxpayer Funding - Inbox - Yahoo! Mail

Visteon Files for Chapter 11 Protection - DealBook Blog - NYTimes.com

 

Ford, from which Visteon was spun off in 2000, has committed to support such debtor-in-possession financing for Visteon’s restructuring efforts and to ensure long-term continuous supplies. Ford accounted for about 31 percent of the company’s first-quarter product sales.

Visteon Files for Chapter 11 Protection - DealBook Blog - NYTimes.com

Ford doing better than GM and Chrysler, but still not very well | csmonitor.com

• The new union deal will save $500 million in annual labor costs.
• In exchange for incentives, creditors agreed to eliminate $10 billion in debt owed by the company – another big cost saving.

Ford may be able to benefit by using GM and Chrysler as a pattern for its own efforts to cut costs

Ford doing better than GM and Chrysler, but still not very well | csmonitor.com

Well-Timed Borrowing Sets Ford Apart From Rivals - NYTimes.com

11-29-2006:  At the time, the request was considered an act of desperation. But the $23.6 billion in loans it received turned out to be Ford’s salvation.

Plunging car sales have driven its two American rivals, General Motors and Chrysler, to the brink of bankruptcy, forcing them to borrow $17.4 billion from the federal government to stay in business

Ford has about a year’s worth of cash left to carry it through a still-depressed car market.

 Click on the following to read the rest of the story:  Well-Timed Borrowing Sets Ford Apart From Rivals - NYTimes.com