A contract formed between General Motors Co. (GM) and the United Auto Workers’ union (UAW) to increase factory jobs and workers’ pay on Friday may prompt Chrysler LLC and Ford Motor Co. to complete similar negotiations.
In their contract with UAW, GM committed to reopening an assembly plant in Spring Hill, Tenn., to add jobs and increase entry-level workers’ pay from $2 to $3 per hour. The new deal also will include a system of profit sharing and improvements in profit checks, a person familiar with the contract told the Wall Street Journal.
The contract awaits finalization until a vote on amendments occurs between union leaders and members. The vote is anticipated to occur later this week.
The UAW typically uses an initial pact with one company to spur negotiations with others, and reportedly hopes the pact with GM will facilitate talks with Chrysler and Ford.
Attaining the same wins for the union is likely to be more difficult with the two successive companies than for GM. Ford will withhold conversations with UAW until the contract with GM is finalized, while negotiations with Chrysler already have begun and are expected to intensify Tuesday, the Wall Street Journal reported.
Ford is expected to have more difficulty than GM in the negotiations as a result of its smaller workforce. Experts also predict Chrysler may have difficulty dealing with the pay increase. About 11 percent of Chrysler’s workers earn the entry-level wage, compared to just 5 percent of GM workers.