New Wage and Benefit Structure for Entry-Level Workers
To keep work in UAW Chrysler plants, and to create a realistic possibility of adding work for future growth, the proposed agreement establishes a pay structure for entry-level workers. The new structure applies to what Chrysler calls “non-core” operations and functions, and is based on comparable wages on an industrywide basis. A joint committee, including union and company representatives, will determine “core” and “non-core” job classifications. No current seniority worker will be assigned entry-level wages even if they are classified in a non-core job. Workers hired in under the entry-level structure will have the ability to move into traditional UAW Chrysler jobs as positions become available. Non-core workers moved to core jobs will receive the wages and health care benefits of active core workers.
Entry-Level Wages
The new entry-level wage structure applies to UAW-represented workers hired into non-core jobs on or after the effective date of the proposed agreement.
The entry-level wage structure has two key elements:
• New wage rates for three classification groupings.
• A new wage formula that provides annual increases driven by (a) the percentage increase in average hourly earnings, excluding overtime, of workers in the U.S. manufacturing sector or (b) the annual rate of inflation, whichever is greater, up to 3.75 percent. (If the wage formula generates an increase above 3.75 percent, the additional amount will be subject to mutually agreed- upon disposition.) Increase will take effect in the first pay period of each calendar year.
In addition to annual wage formula increases, entry-level workers with seniority as of the designated eligibility date will receive performance bonuses in each year of the four-year agreement. An entry-level worker’s performance bonus will be equal to 3 percent of qualified earnings during the previous 52 pay periods. Performance bonuses will be paid in May 2008, 2009, 2010 and 2011, based on April eligibility dates.
• Entry-level workers will advance from the starting rate to the full rate for their classification in four progression increases, one every 26 weeks.
• Entry-level workers are not eligible for the Christmas bonus or ESS program.
• Supplemental Unemployment Benefits: Entry-level workers with at least one but less than three years seniority will be eligible for 26 weeks of SUB. That increases to 52 weeks for workers with three or more years seniority, which can be extended to an additional 104 weeks.
Entry-Level Benefits
Entry-level workers will be covered by a separate health/pension plan, including the following elements:
· Pensions: The current pension provisions will be replaced by a Cash Balance Defined-Benefit Retirement Plan. Chrysler will deposit 6.4 percent of workers’ wages into a portable retirement plan, which will generate interest tied to the 30-year U.S. Treasury bond. The plan provides for three-year vesting.
· Health Care Plan: Entry-level workers will be covered by a health care plan, with annual in-network deductibles of $300 single/$600 family. Coinsurance will be 10 percent in-network, with an annual cap on out-of-pocket expenditures of $1,000 single / $2,000 family.
Flexible Spending Account
Entry-level workers will be eligible for a credit to a Flexible Spending Account in the amount of $300 for single health care coverage, or $600 for an individual with family coverage.
401(k) Retirement Health Care Plan
Workers hired after the effective date of the proposed agreement will not have company contributions for health care coverage in retirement. In lieu of the contributions for health care coverage in retirement the company will contribute an amount equal to $1for every compensated hour during the working career of all new hires, into the employees 401(k) plan.