Fiat Chrysler, UAW reach tentative contract deal

But Harley Shaiken, a labor expert and professor at the University of California at Berkeley, noted that almost half of FCA’s factory workers joined the company after 2010. Unifor Local 200 represents workers at Ford’s Essex Engine Plant in Windsor. A strike or lockout would affect the supply of parts flowing to Canadian facilities. “From the union’s point it would be better to not give the long-term workers a raise and bring up the pay of younger workers, especially for improving the union’s perception among non-union workers”.

“The economics of the package are what we take into consideration”, Chiodo said. “Potentially more costs could be reduced out of the American plants over what we offer here in Canada”.

Mr. Marchionne didn’t provide details, but his comments reflect his long-standing belief that the two-tier structure isn’t sustainable.

The UAW began collective bargaining with Ford, General Motors and Fiat Chrysler in July for the rights of about 140,000 hourly us workers. After prolonged talks, a four-year agreement between the automaker and the labor union was signed on Tuesday.

Marchionne insists he played only a limited role in finalizing the agreement while heaping praise on both Williams and Norwood Jewell, the head of the union’s FCA USA section, for their patience, persistence and professionalism. For the first time in more than a decade, Ford, GM and Fiat Chrysler and the UAW are negotiating with the wind at their backs, which can actually make the talks tougher. In fact, other experts consider the move more of an insurance policy for FCA rather than a deal that would benefit GM. FCA is the only one of the Detroit Three whose USA labor costs are lower than foreign competitors like Toyota; Ford and GM think that’s an unfair advantage and want to be on par with FCA. Employees that now make more than $25 an hour will be grandfathered in. Their endorsement of the pact is important as UAW leaders try to win ratification from UAW-FCA workers.

While Detroit automakers said they needed to ensure wages didn’t rise under their new, four-year contracts, they faced heavy pressure from the UAW rank-and-file in the wake of strong profits they have reported lately. FCA workers went on a seven-hour strike during contract negotiations in 2007 but were prohibited from striking in 2011 under terms of a government-funded bankruptcy. But he has indicated the top wages should come down in favour of fatter profit-sharing checks.

Only around 20 per cent of workers at Ford and GM made the lower wage. Marchionne appeared to support the UAW on eliminating the two-tier wage structure and his willingness to resolve that issue was probably a key factor in how quickly and painlessly a tentative agreement was reached.

Those costs include wages and benefits, including very expensive healthcare plans.

“I’ve dealt with three different UAW presidents over the past six years and I believe you’re seeing a new maturity in the union’s relationships with the companies”, Marchionne said as he sat next to Williams on a stage crowded with union members.