Fiat Chrysler Is Lead Company in UAW Contract Overhaul

UAW President Dennis Williams recently indicated that a strike target will now be announced by today. So far, an agreement hasn’t been reached and the union members are preparing for battle. GM and Ford, even with the higher labour costs, are more profitable than Fiat Chrysler. Worker compensation at the entry level tops out at $19.28 per hour while veteran employee compensation peaks at $28.69 per hour, according to Forbes.

The UAW agreed to the two tiers of pay when then-Chrysler was near bankruptcy in 2007. But the Toledo complex operates seven days a week with just two crews and a slew of temporary workers. Sales are up 21 percent this year alone, and they make FCA US, the American arm of Fiat Chrysler Automobiles, crucial to the overall group.

In the distant past, automakers wanted to avoid being targeted first because it meant they would have to accede to the UAW’s maximum demands or face a strike.

Norwood Jewell, head of labor negotiations for the UAW’s Chrysler Department, said Monday in a letter to members that a majority of the local unions had reached tentative local contract agreements.

FCA’s manufacturing base in Toledo, Ohio churns out more than 400,000 popular Jeep models like the Cherokee and Wrangler a year, many of them for export markets around the world.

The decision to extend the contract indicates the two sides are making progress on complicated pay and benefit issues. With about 45% of its hourly workforce earning the lower wage, the company has about a cost advantage of $9 to $10 an hour over rivals GM and Ford. Fiat Chrysler confirmed it is the target.

Marchionne has been outspoken about wanting to eliminate the wage gap. It also includes profit-sharing checks that only come in good years.

The system is indeed hated by first and second-teir workers alike, and a major factor in the 98 percent strike vote by workers at FCA, GM and Ford is their determination to abolish it once and for all. GM has about 2,880, while Ford’s only presence in northwest Ohio is the Lima engine plant, which has about 825 employees. Around 140,000 US factory workers are covered under the contracts.

Settles also said Ford is is “one of the most decent companies to negotiate with”.

As for the automakers, they want to reduce the rise in health care costs, and flexibility to shift workers among various jobs.

When Marchionne was asked about the possibility to abandon V-8s such as the Hellcat, he said “No. We offset”.

Williams and Marchionne praised each other for a cooperative relationship during the talks.

Early Monday, it appeared likely that the union would reach a new accord with FCA before the contract expired.