New Contract Protects Wages,
Provides Four Lump Sums
The proposed agreement protects the wages of UAW hourly workers at Chrysler, and provides four lump-sum payments, one in each year of the agreement.
Projected Total Gains
Total economic gains from the proposed agreement add up to $10,235 for a typical Chrysler assembler, based on a standard, 2,080-hour year and 10 percent overtime. That figure includes the $3,000 settlement bonus and performance bonuses of 3 percent, 4 percent and 3 percent.
Settlement and Performance Bonuses
UAW-represented Chrysler workers who are on the active roll on the effective date of the agreement will receive an up-front settlement bonus of $3,000. Workers on pre-retirement leave, in protected status, on temporary layoff or on Family and Medical Leave, on vacation, receiving paid absence allowance, receiving bereavement pay, on jury duty or on leave of absence not earlier than 90 days prior to the date of the agreement are also eligible. The settlement bonus will be paid in the second pay period following official notification of the agreement’s ratification.
Three additional bonuses will be paid in the second, third and fourth years of the agreement. In October 2008, UAW-Chrysler workers with seniority as of Sept. 15, 2008 will receive a lump sum performance bonus equal to 3 percent of qualified earnings (including base wages, COLA, overtime, shift and seven-day operator premiums, call-in pay, vacation, holiday and other paid time off) over the preceding 52 pay periods. In October 2009, workers with seniority as of Sept. 21, 2009 will receive a lump sum bonus equal to 4 percent of qualified earnings. A final performance bonus, equal to 3 percent of qualified earnings, will be paid in October 2010, to workers with seniority as of Sept. 20, 2010.
Cost of Living Allowance
The proposed agreement maintains the existing COLA formula, based on the CPI-W for all items less medical care. $1.19 of the current $2.25 COLA float will be folded into base wage rates as of the effective date of the agreement. The remaining $1.06 will be the initial COLA float. This will bring base rates at Chrysler in line with those at Ford and GM, where workers deferred their September 2006 3 percent increase to help fund retiree health care.
To defray the cost of health care benefits for active workers, and to fund the new VEBA that will secure lifetime health benefits for current and future retirees, the proposed agreement calls for the diversion of $.10 per quarter in COLA adjustments over the term of the agreement; $.02 of that diversion will continue permanently. If a quarterly COLA adjustment is less than $.10, the company will not have the right to make up the difference in future quarters.
Additional COLA diversions adding up to a cumulative $1.01 will help fund the new VEBA for current and future retirees. Over time, these diversions will gradually bring COLA for UAW-Chrysler workers in line with COLA at GM and Ford, where workers have been making additional diversions for retiree health care since 2006.
Wage Rollback Defeated
Chrysler entered these negotiations demanding to take back your September 2006 Annual Improvement Factor (AIF) wage increase and 17 cents of COLA, amounts that GM and Ford workers are paying to help fund retiree health care obligations under their 2005 agreements. The impact of this demand would have been to cut the wages of Chrysler workers immediately by $1.01 per hour.
Your bargaining team successfully resisted the company’s demand to cut your pay. Instead, this $1.01 will come out of future COLA diversions that will be used to secure health care for current and future UAW Chrysler retirees.
Under this approach, Chrysler workers will continue to earn more than workers under the recently ratified GM agreement until the full $1.01 is offset. As a result, based on projected rates of inflation, earnings for a typical UAW Chrysler member working 10 percent overtime will be an estimated $6,700 higher than his/her counterpart at GM over the four years of the proposed agreement.
Procedure to Correct Pay Shortages
New language adds paid absence allowance and holiday, jury duty, short-term military duty and bereavement pay to be included in the 24-hour pay shortage process.
For workers who currently receive their regular pay by paper check, this shortage payment check will be sent to the plant using next-day delivery service. For workers who receive their regular pay by electronic funds transfer (EFT or E-pay), an electronic statement will be issued.
Plant kiosks will be incorporated into all plants no later than the first quarter of 2008, which will aid in the processing of paid absence allowance, jury duty, short term military duty and bereavement pay requests.
The 24-hour pay shortage process is not intended to provide payment of paid absence allowance and holiday, jury duty, short-term military duty and bereavement pay in a period earlier than it would have been paid.
Profit Sharing
The profit-sharing formula will continue unchanged. In conjunction with the discussions on the new VEBA, the impact of savings in retiree health care expense will be excluded from the calculation of profits for profit-sharing purposes over the term of the agreement. New language ensures that Cerberus cannot use management and advisory fees or transactions with other companies it owns to reduce the profits shared with UAW Chrysler hourly workers.
Unclaimed Paychecks
Arrangements will be made to mail all unclaimed paychecks to the worker's home. The new procedure will begin 30 days following the effective date of the agreement.
Payment in Lieu of Vacation – Retirees
UAW retirees will receive all vacation payment entitlements in their last scheduled paycheck following the week in which they separate.