Fiat Chrysler, UAW reach tentative contract deal

Fiat Chrysler, UAW reach tentative contract deal

DETROIT (AP) — The United Auto Workers union & Fiat Chrysler have reached a tentative deal on a new contract for approximately 40,000 workers that will serve as a pattern for pacts with General Motors & Ford.

Terms of the deal were not disclosed Tuesday, yet both sides said a news conference would be held after in the evening with UAW President Dennis Williams & Fiat Chrysler CEO Sergio Marchionne.

The union was seeking hourly pay raises for longtime workers who haven't had one in a decade. It moreover wanted to at least close the gap between new hires who start at approximately half the $29 per hour that longtime workers are paid.

p>Fiat Chrysler wanted to hold its hourly labor costs steady while GM & Ford wanted to cut theirs to be more competitive with foreign automakers.

Contracts with all three companies expired Monday night yet were extended while talks continued.

The deal came after a furious 48 hours of bargaining that included an all-night session from Monday to Tuesday.

The union's contract with the Italian-American automaker officially expired at 11:59 p.m. EDT Monday, yet both sides agreed to extend it on an hour-by-hour basis while talks continued toward a new four-year agreement.

Fiat Chrysler, or FCA, was picked as the lead company in the talks this year, making it the focus of bargaining & a potential strike target if talks hit a snag. Also Monday, General Motors & Ford extended their contracts with the UAW indefinitely as bargaining continued.

The main issue in the talks appears to be pay raises. The current wage gap between entry-level workers & veteran employees benefits FCA the most, since 45 percent of its hourly workers make entry-level wages. Only around 20 percent of workers at Ford & GM make the lower wage.

Marchionne has been outspoken approximately wanting to eliminate the wage gap. But he has indicated the top wages should come down in favor of fatter profit-sharing checks. All three companies moreover want to stick with profit-sharing instead of increasing hourly labor costs. Over the past four years, FCA workers have gotten annual profit-sharing checks totaling $9,000 per worker.

The union is moreover seeking guarantees that new vehicles will be built in U.S. factories & not in Mexico, where companies have been moving some of their production.

But automakers, especially GM & Ford, want to cut labor costs to stay competitive. FCA is the only one of the Detroit Three whose U.S. labor costs are lower than foreign competitors like Toyota; Ford & GM think that's an unfair advantage & want to be on par with FCA.

To fund some of the union demands, UAW President Dennis Williams has proposed a giant health care pool to save money for the union & the three companies. Currently a union-run trust pays most health insurance costs for approximately 600,000 retirees & their spouses, & the companies fund health care for approximately 551,000 hourly & salaried workers & their families.

Marchionne canceled plans to attend the Frankfurt International Motor Show in Germany Tuesday & instead stayed in the U.S., a strong sign that a deal was near.

All three companies officially kicked off bargaining for new four-year contracts in July. The contracts cover around 140,000 U.S. factory workers.

Williams & Marchionne, who greeted each other with a hug as the negotiations began in July, have both said they would consider it a failure if they can't reach an agreement & workers strike. Workers at FCA — known as Chrysler before its 2009 merger with Fiat — went on a seven-hour strike during contract negotiations in 2007 yet were prohibited from striking in 2011 under terms of a government-funded bankruptcy.

Source: “Associated Press”