UAW Extends FCA Current Contract on Hourly Basis

“The UAW has to get an agreement that will pass Fiat, otherwise it’ll blow up their pattern”.

One of the calculations Fiat Chrysler has to make is how long it can be without newly manufactured cars and light trucks.

The current contract expires today at midnight.

The contract expired at 11:59 p.m. EDT Monday, but talks continued past the deadline. There was no word on a GM contract extension, but it was expected.

Analysts say it was a sign Marchionne was serious to get a deal done and could indicate the two sides are closing in on an agreement.

Even so, a strike is unlikely, said Gary Chaison, a labour professor at Clark University in Worcester, Mass. The union is trying to organize the USA factories of global automakers such as Volkswagen AG and doesn’t want to appear hostile, he said. “Getting an optional agreement for FCA is ultimately good for FCA workers”.

The UAW usually reaches a deal with one company first, often the strongest, in hopes of setting a template for pay and benefits for the other two Detroit automakers to follow.

Fiat Chrysler has about 6,500 hourly employees in the greater Toledo area. FCA is the industry’s largest buyer of emissions credits for the 2013 model year, purchasing most of its credits from Tesla. As negotiations are ongoing, the Company can offer no further comment at this time. Among the biggest desires were getting hourly raises for longtime workers who have gone a decade without one, and addressing the two-tier wage structure which pays recent hires less.

Chrysler, now known as Fiat Chrysler USA , has had a hard time ratifying the contract before.

When both FCA and GM filed for bankruptcy in 2009, the initial cap on second-tier workers was limited to 20 percent. Now, it has to deal with demands to close the salary gap between entry-level and veteran workers and give Tier 1 workers their first wage increase in 10 years.

All three companies also want to stick with profit-sharing instead of increasing hourly labor costs.

“This is the recognition that the union has had for a while, that you can’t destroy the companies and still have jobs”, she said.

Fiat’s Mr. Marchionne is a formidable negotiator and has in the past gotten directly involved in talks, sitting right at the bargaining table.

“It’s about whether or not the company has a greater ability to pay”, he said.

“I think obviously Toledo is a very important part of this overall negotiation for Chrysler”.

UAW members have authorized their leaders to strike each company, if necessary.

There are serious differences in talks at FCA, union officials told AFP. This year’s dynamics were unusual because Fiat Chrysler laid bare its need for a merger partner.