Before the ink is even dry on the new UAW contract so narrowly ratified by workers at Chrysler this week, the company's never-sit-still CEO Sergio Marchionne is already jawboning for changes in the 2015 union deal.
In a conference call Friday, Marchionnecheap jerseys from china declared that the two-tier wage system for Chrysler, Ford and General Motors hourly workers -- whereby new hires are paid far less than longtime workers -- is not sustainable or desirable long term.
"Trying to get this whole organization to work in unison when you've got this kind of economic disparity between people on the line is not something that can go on for a long period of time," he said.
Marchionne didn't offer specific proposals on how to merge the pay scales, or how long that process might take. But his provocative comments are sure to create a buzz among his fellow CEOs and the labor negotiators at GM and Ford.
Eyebrows will be raised, too, at the UAW's Solidarity House headquarters over Marchionne's view that all Chrysler workers need to "share in the downside" when economic cycles deplete company coffers.
'Not a viable structure'
It's worth a look at exactly what Marchionne had to say in his extended remarks on the two-tier wage system. Here are excerpts from the call with reporters and industry analysts:
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"The issue of the two-tier wage structure is that, in and by itself, it is certainly in the long term not a viable structure on which to build our industrial footprint.
"It creates two classes of workers within the plant ...
"This whole notion of trying to get this whole organization to work in unison when you've got this kind of economic disparity between people on the line is not something that can go on for a long period of time.
"So the comments that I've 2011 NHL all star Jerseysmade are really to be interpreted as a desire on our part to find an equitable solution to this by effectively aligning in the long term to have one class of workers to survive -- and really become the class going forward. It may take a period of time ...
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"Fundamentally, we need to have one set of wage rates which clearly recognize participation of our people in the profit-generation capability of the house," Marchionne said, referring to Chrysler.
"I have always believed ... that we do need to provide real upside to our workers as long as the organization performs and continues to deliver value.
"On the other side of that equation, there's got to be an undertaking and a commitment by our people to share in the downside risk of this venture, because of the potentially cyclical nature of the business that can create conditions of fundamental economic instability -- and those are things that this house cannot afford to entertain.
"We have gone through an incredibly difficult period back in 2008 and 2009. It is in our collective interest to find a solution that effectively guarantees for the house a credible way of going forward and dealing with a down cycle, wcheap jerseyshile rewarding people properly on the upside.
"I firmly believe that needs to be the solution going forward. I think it's too early to tell and to rediscuss what the elements of that solution will be, other than the fact that it needs to get done.
"I think there's a recognition on the part of the UAW leadership, and there's certainly a recognition on our part, that that needs to be done.
"We have some time now to work on this project. We've got a four-year contract term, which is ample runway to start the dialogue and bring it on, certainly at the time we get together again in 2015."
Noting that 13% of Chrysler current hourly UAW workforce is at the entry-level wage of around $15 per hour -- slated to rise to around $19 in the next few years -- Marchionne said at least 25% of hourly workers will be second-tier by 2015.
"By that time," he said, "it's going to become even a more significant portion of our industrial work force. It's structurally undesirable to have this diversity of pay scales.
"So we need to try to find a way to get them merged in some fashion, to have one class survive all this, with an upside that looks phenomenally interesting to people coming into Chrysler and gives them a basis for confidence in the future."
"I think we all know," he added, "that the objective here was fundamentally to create an equitable arrangement where we could distribute wealth at Chrysler as we move on."
Devil's in the details
Marchionne will certainly find common ground with fellow Detroit CEOs on the imperative to limit fixed-wage costs and reward hourly workers with bonus cash in good times. And the UAW's King has sounded a warning similar to Marchionne's about the problems inherent in a two-class wage scale.
But the devil will be in the details.
Would the UAW want to "share in the downside" if that meant base wage cuts? Not likely.
Would the companies have to spend bundles to buy out longtime workers or speed the catch-up period for new hires to achieve pay equity?
Knotty questions, those. But leave it to Sergio to get the debate going.http://tvhaiz.pops.tv/t2-topic
