By Nick Carey
KOKOMO, Ind. (Reuters) - Workers outside the gates of a Fiat Chrysler (NYSE:FCAU) plant here greeted news early on Thursday of a new tentative agreement between the automaker and the United Auto Workers skeptically, giving an indication of the challenges the union may face in getting the deal ratified by members.
Last week, 65 percent of Fiat Chrysler unionized workers voting rejected a proposed four-year contract. UAW production workers in Kokomo voted against the proposed contract by a margin of 2,555 to 723.
Some workers complained that the first tentative deal put more of a burden on them and treated retirees unfairly, but the biggest bone of contention was over wages. The proposed agreement would have narrowed the gap between veteran UAW workers, who earn about $28 an hour, and more recent hires, who are paid about $19 an hour.
But workers said it did not narrow the gap sufficiently or fast enough.
"They have to give them younger folks what they need, they have to give them more money," said Carl Durham, 45, who has worked here for 20 years and makes $28 an hour. "If they give them more money, we won't have no problems."
The failure of the first agreement led the UAW to threaten a strike against Fiat Chrysler, which was to begin Wednesday at one minute before midnight eastern time. That would have been the first stoppage at a U.S. automaker since 2007. When word of a new deal trickled out after midnight, the two-tier wage system was again an issue for workers gathered in a parking lot opposite the plant.
"When you have people working side by side doing the same job for different wages, it causes tensions," said Lakeysha Woodare, 41, a first-tier worker making $28 an hour who voted against the first contract. "So if they don't address that in the new agreement, I'm not voting for it."
Negotiations late on Wednesday lasted until just before the midnight deadline, said Carl Greenwood, head of UAW local 685 in Kokomo. The local represents workers at three transmission plants in Kokomo and one in nearby Tipton, Ind.
"I had my finger on the button ready to tell everyone to walk out and I got a text at 11:55 from the international saying we have a tentative agreement," Greenwood said.
Local UAW leaders will meet in Detroit on Friday morning to learn details of the revamped agreement.
"What worries me is that it will be all over Facebook (NASDAQ:FB) by the time we get to Detroit," said Greenwood.
"It will be difficult to get any contract ratified that doesn't address the tiered wage system," he said. "That's the biggest obstacle out there."
Greenwood said the main issue for workers, especially second-tier workers, is that under the first agreement it would take eight years for them to get up to $25 per hour, or the span of two contracts. Most second-tier workers would be "able to live with" a contract that allows them to reach $25 within four years, he added.
If Fiat Chrysler workers reject the latest deal, that would make it difficult for the UAW to have a similar agreement ratified by workers at General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co.
"We heard from our members, and went back to FCA to strengthen their contract," UAW President Dennis Williams said in a statement. "We've reached a proposed Tentative Agreement that I believe addresses our members' principal concerns about their jobs and their futures."
Workers in the second tier outside the plant early Thursday said they were also keen to see the wage gap close. Alston Horner, 25, makes $18.01 an hour, which includes a 50-cent an hour bonus for being a team leader, said the old agreement would have had his wages increase to $25 an hour over eight years. But with the next round of contract talks due in four years, he worries that could be reversed in 2019.
"If the new deal doesn't have us moving up (in wages) in four years, I won't vote for it," he said.
While newer workers said they were ready and willing to strike if the union had ordered them to, most said they were living paycheck-to-paycheck and would find it hard to get by for long without that income.
"I have to work to feed my family," said Aaron McCune, 21, who has an 11-month-old daughter. "So when all's said and done, as long as I have a job, I don't care what happens."