Fiat Chrysler, auto union reach ten­ta­tive deal on new con­tract

Antelope Valley Press (Sunday) - - Business -

DETROIT — The United Auto Work­ers and Fiat Chrysler reached a ten­ta­tive agree­ment Satur­day on a new four-year con­tract, which in­cludes a to­tal of $9 bil­lion in in­vest­ments but still needs fi­nal ap­proval from work­ers.

Both sides de­clined to of­fer de­tails on the deal, but it in­cludes a $9,000 bonus for work­ers when the agree­ment is rat­i­fied, a prom­ise not to close any fac­to­ries where ve­hi­cles are as­sem­bled for the next four years, and a com­mit­ment to keep mak­ing ve­hi­cles at a plant in Belvidere, Illi­nois, ac­cord­ing to a per­son briefed on the mat­ter. The per­son spoke on con­di­tion of anonymity be­cause the talks are con­fi­den­tial.

The UAW-FCA na­tional coun­cil will meet Dec. 4 to go over the de­tails of the ten­ta­tive deal. If adopted, it would go to Fiat Chrysler Au­to­mo­biles’ 47,000 union work­ers, and a vote by hourly and salary work­ers could be­gin on Dec. 6.

Fiat Chrysler is the last com­pany to set­tle on a new con­tract with the union. GM set­tled Oct. 31 af­ter a bit­ter 40-day strike that par­a­lyzed the com­pany’s U.S. fac­to­ries, but Ford reached a deal quickly and set­tled in mid-Novem­ber.

Talks have fo­cused on Fiat Chrysler for al­most two weeks, and both sides ne­go­ti­ated into the early morn­ing hours ear­lier this week be­fore tak­ing a break for the Thanks­giv­ing hol­i­day.

The Illi­nois fac­tory west of Chicago now makes the Jeep Chero­kee small SUV and em­ploys about 3,700 union work­ers on two shifts.

Of the $9 bil­lion in to­tal in­vest­ments in­cluded in the deal, half were newly an­nounced Satur­day, and the other $4.5 bil­lion are in­vest­ments an­nounced ear­lier this year.

The $9,000 rat­i­fi­ca­tion bonus isn’t as much as the $11,000 that GM work­ers got, but it’s equal to the money paid to Ford work­ers. Both com­pa­nies gave work­ers a mix of pay raises and lump-sum pay­ments, rat­i­fi­ca­tion bonuses, an end to a two-tier pay scale for full-time work­ers and a clear path for tem­po­rary work­ers to go full-time.

The union also got com­mit­ments for new ve­hi­cles to be built at sev­eral GM and Ford fac­to­ries.

Even if union lead­ers ap­prove the deal, rat­i­fi­ca­tion isn’t guar­an­teed. In 2015, work­ers voted down the first deal reached with Fiat Chrysler but ap­proved a se­cond one.

Fiat Chrysler ap­par­ently is agree­ing to the “pat­tern” agree­ment reached with GM and Ford even though the com­pany’s CEO said ear­lier this month that all of the com­pa­nies are in dif­fer­ent la­bor cir­cum­stances. Fol­low­ing the same deal would cost Fiat Chrysler more be­cause the makeup of its work­force is dif­fer­ent. FCA has more tem­po­rary work­ers than ei­ther GM or Ford, and it also has more so-called “se­cond tier” work­ers hired af­ter 2007 who now make less than long­time work­ers.

The deal with Ford and GM gives pay raises to work­ers hired af­ter 2007, so they reach top UAW pro­duc­tion wages of more than $32 per hour within four years. It also gives tem­po­rary work­ers a path to full-time jobs within three years.

Ford has about 18,500 work­ers hired af­ter 2007 who will get big pay raises with the new con­tract, com­pared with GM’s 17,000. Fiat Chrysler has over 20,000 union em­ploy­ees hired af­ter 2007.

In ad­di­tion, about 11% of Fiat Chrysler’s UAW work­force is tem­po­rary, while Ford has a cap at 8% and GM is around 7%.

Fiat Chrysler in past years has en­joyed a la­bor-cost ad­van­tage com­pared with Ford and GM. FCA’s la­bor costs, in­clud­ing wages and ben­e­fits, amounted to $55 per hour go­ing into the con­tract talks, while they were $61 at Ford and $63 at GM, ac­cord­ing to the Cen­ter for Au­to­mo­tive Re­search, an in­dus­try think tank. That com­pares with an av­er­age of $50 per hour at U.S. plants owned by for­eign-based au­tomak­ers.

Gen­eral Mo­tors last week filed a fed­eral rack­e­teer­ing law­suit against FCA, al­leg­ing that the com­pany bribed UAW of­fi­cials to get more fa­vor­able con­tract terms than GM. Fiat Chrysler has called the law­suit “mer­it­less.”

Gen­eral Mo­tors al­leges that the move, which it con­tends cost it bil­lions of dol­lars, was aimed at forc­ing a merger with Fiat Chrysler that was des­per­ately sought by FCA CEO Ser­gio Mar­chionne, who died in 2018. Last month, Fiat Chrysler an­nounced plans to merge with France’s PSA, which will cre­ate the world’s fourth-largest auto com­pany worth $50 bil­lion.

The Fiat Chrysler talks could be com­pli­cated by an on­go­ing fed­eral bribery and em­bez­zle­ment in­ves­ti­ga­tion into some of the UAW’s lead­er­ship, which started at Fiat Chrysler. Many work­ers at the com­pany have been sus­pi­cious of the union’s lead­er­ship since the scan­dal be­came pub­lic in 2017.

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