Collective Bargaining

Topics: Negotiation, Collective bargaining, Employment Pages: 6 (775 words) Published: October 19, 2011
The process of collective bargaining is

one that is includes many strategies. The intent

of collective bargaining is to reach a unified

agreement that satisfies both parties. A perfect

example of the use of the principles defined in

the article “Behavioral Research in Negotiations:

An Application to Collective Bargaining” by John

Magenau is the negotiations that are occurring

between the UAW and Chrysler. There are many

issues that have halted the negotiations

between the UAW and Chrysler. But one of the

more prevalent issues surrounds wage

increases. Chrysler currently has employees that

are working at a lower wage rate called Tier 2

employees. The Tier 2 employees are presently

working for $14 per hour which is about half of

what the Tier 1 employees are paid. And as a

part of this contract negotiation, the UAW wants

to negotiate for wage increases for these

employees. Chrysler has taken the stance of no

fixed costs which includes wage increase.

In the article, Magenau makes reference

to demands, aspirations and limits to describe a

negotiators position on an issue. The demand of

the UAW is that the Chrysler Tier 2 employees

receive a set dollar amount raise at the signing

and ratification of this contract and continue to

receive a percentage increase over the life of the

contract until the Tier 2 employees cap out at

around $20 per hour. However, Chrysler is

looking to offer zero increases in wages for the

Tier 2 employees. Chrysler’s demand is to

instead offer buyouts to higher seniority

employees to make room to hire even more Tier

2 employees.

Although these demands may seem

etched in stone for both sides, both parties

certainly have some aspirations that can be

represent an acceptable outcome. Chrysler may

want to hold firm that there will be no wage

increases for the Tier 2 employees, but it is a

known fact that the 2-tier wage system lowers

employee morale and performance. It is also

know that the current wages of $14 per hour are

not an acceptable living wage and does not

afford the employees the opportunity to

purchase the products that they build every day.

With this information at hand, Chrysler certainly

has aspirations to offer some sort of increase in

wages to the Tier 2 employees that would be

acceptable to their bottom line. The limit for

Chrysler may be at about 1/3 of what has been

proposed by the UAW as the wage increase. For

the UAW, the aspiration is likely that the

employees will receive half of what they have

proposed as an increase in wages.

Magenau states that “the bargainer’s

limit is usually not disclosed and can be defined

as the smallest outcome acceptable in the

foreseeable future.” He also states that “he or

she would rather break off negotiations than

accept anything less.” Given the announcement

that contract negotiations have been extend, it is

very obvious that the UAW and Chrysler are in

some sort of settlement range. The counter

offers between the two parties must be within

the limits that have been set by each party

respectively. Prominent alternatives have no

doubt been offered by Chrysler to keep the UAW

at the bargaining table and keep its assembly

plants operational. Cost of living increases are

generally one the most popular of the

prominent alternatives offered by automakers

at contract negotiations. This alternative will

probably be offered with the equity principle so

that Tier 2 employees receive a more sizable

increase than the Tier 1 employees. The

alternative will also probably be a one-time

increase and prevent Chrysler from incurring

continued fixed cost increases.

Magenau states in the article that

negotiations usually end with unilateral

conceding when a bargainer has a high MA

(motivation to reach an agreement) but a low...
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