Deal with UAW may be near

Associated Press

DETROIT

Contract talks between Fiat Chrysler and the United Auto Workers union edged toward a deadline Monday night with no word on whether a deal would be reached or if terms of the existing pact would be extended.

The UAW’s contracts with FCA, Ford and General Motors expired at 11:59 p.m. Monday, though Ford and GM earlier in the day extended their agreements indefinitely. There was no immediate word from the union or FCA early today.

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

CEO Sergio Marchionne canceled plans to attend the Frankfurt International Motor Show in Germany and instead stayed in the U.S., a strong sign that a deal was near. Both sides said they continued to negotiate well into the evening at a Chrysler-UAW joint training center just north of downtown Detroit.

Harley Shaiken, a labor expert and professor at the University of California at Berkeley, said he thinks FCA and the UAW would like to reach a tentative agreement before the deadline. Shaiken said he believes Marchionne canceled his trip in order to be at the table in case there are last-minute holdups.

On Sunday, the UAW announced that it had picked Fiat Chrysler as its target company in the contract talks. That means a deal with FCA could set a general pattern for contracts at General Motors and Ford. FCA could also be hit with a strike if negotiations stall, although workers at several FCA factories said Monday they had not been told of any strike plans.

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

Kristin Dziczek, director of the industry and labor group at the Michigan-based Center for Automotive Research, said union members can expect some financial gains in this contract, since all three companies are healthy and profitable. But they have to be careful, since automakers can move their operations to lower-cost countries such as Mexico if their U.S. labor costs get too high.

The union wants hourly pay raises for longtime workers who haven’t had one in a decade. It also wants to close the wage gap for entry-level workers, who start at about half the $29 hourly wage of veteran employees. The wage gap benefits FCA the most, since 45 percent of its hourly workers make entry-level wages. Only around 20 percent of workers at Ford and GM make the lower wage.

Marchionne has also been outspoken about wanting to eliminate the wage gap. But he has indicated the top wages should come down in favor of fatter profit-sharing checks. Shaiken expects the new contracts will phase in higher wages or otherwise bridge the wage gap.

All three companies also want to stick with profit-sharing instead of increasing hourly labor costs. During the past four years, workers have gotten annual profit-sharing checks; at FCA, those bonuses totaled $9,000 per worker.

UAW President Dennis Williams and 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 and 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 but were prohibited from striking in 2011 under terms of a government-funded bankruptcy.