UAW negotiators had set a midnight Wednesday deadline to reach an agreement.
Today’s bounce puts Fiat up 19.4% over the last five trading sessions to stand above where it traded before the Volkswagen emissions scandal broke.
Entry-level workers could reach a new wage level of $29 an hour over eight years, putting them at par with their senior colleagues and eliminating the much-hated two-tier pay scale under a new proposed tentative agreement between the UAW and Fiat Chrysler Automobiles.
FCA has the largest share of Tier 2 workers, at about 45 percent, versus 28 percent at Ford and 20 percent at GM.
Workers outside the gates of a Fiat Chrysler plant in Kokomo, Indiana, 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.
“We’ve reached a proposed Tentative Agreement that I believe addresses our members’ principal concerns about their jobs and their futures”, said UAW president Dennis Williams. Williams added the union has made real gains and is planning a discussion about the terms with its members.
A ratification bonus of $3,000 remains the same in the newly proposed contract, sources said. The greater amount was a means to help bridge the wage gap – a mechanism no longer needed with the new wage increases for the second-tier workers.
The UAW National Chrysler Council, made up of leaders from union locals, meets in Detroit on Friday to discuss the accord and whether to send it to a vote by rank-and-file members. Automakers book revenue when they ship vehicles to dealers, and 18 of the company’s 28 North American facilities are in the U.S. At the end of September, Fiat Chrysler said it had a 76-day supply of vehicles, or about 590,503 cars and trucks. In the past decade, strikes by the UAW have been infrequent, with the previous two in 2007 when employees struck General Motors for a couple of days and Chrysler for 6 hours.
UAW, which represents around 40,000 FCA factory workers at 23 US plants, said in a post on its website that its bargaining committee had “secured significant gains”. On average, those employees are paid $9 to $12 less per hour less than workers hired before the recession.