Tuesday, September 15, 2015
DETROIT (AP)
The United Auto Workers union and Fiat Chrysler have reached a tentative deal on a new contract for about 40,000 U.S. factory workers that will serve as a template for pacts with General Motors and Ford.
Terms of the deal weren’t disclosed Tuesday. Fiat Chrysler’s U.S. hourly workers must vote to ratify the agreement before it can take effect.
UAW President Dennis Williams said the agreement meets the union’s goals but still keeps Fiat Chrysler competitive. Williams said his three goals for the new four-year contract were to give entry-level workers a path to higher pay, reward members for sacrifices they made while Fiat Chrysler struggled financially, and to deal with escalating health care costs.
“We believe that we have met those goals, but ultimately our membership will make the final decision,” Williams said at a news conference to announce the deal this evening.
The union was seeking hourly pay raises for longtime workers who haven’t had one in a decade. It also wanted to narrow or close the wage gap for new hires, who start at about half the $29 per hour that longtime workers are paid.
The UAW agreed to the two tiers of pay when then-Chrysler was near bankruptcy in 2007. But Fiat Chrysler CEO Sergio Marchionne agreed with the UAW that tiered wages were unfair to workers. Marchionne said negotiators came up with a carefully crafted agreement “whereby that issue will go away.”
The UAW and began bargaining in July with Ford, GM and Fiat Chrysler. Contracts with all three companies — which cover around 140,000 U.S. hourly workers — expired Monday night but were extended while talks continued.
Fiat Chrysler, or FCA, was picked as the lead company in the talks this year, making it the focus of bargaining and a potential strike target if talks hit a snag.
The deal with FCA came after a furious 48 hours of bargaining that included an all-night session from Monday to Tuesday.
While the agreement will serve as a pattern for pacts with Ford and GM, there are significant differences in the companies. Ford and GM are larger and make more money. Also, FCA is the only one of the Detroit Three whose U.S. 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.
Williams said some parts of the deal will transfer to Ford and GM, but other provisions will be different. Agreements with Ford and GM won’t be reached this week, he said.