FCA confirmed its selection but said it would have no further comment.
The decision of choosing Fiat Chrysler’s FCA U.S. unit as the target company for shaping the new contract was disclosed by the union on Sunday. “The UAW has to get an agreement that will pass Fiat, otherwise it’ll blow up their pattern”. Majority haven’t received base pay raises in a decade.
Earlier Monday, Ford and General Motors extended their contracts with the UAW indefinitely.
In General Motors, the more than 50,000 UAW-represented workers voted nearly unanimously (97%) in favor of going on strike in case negotiations with top management fail. Union leaders argue that the companies’ strong sales means they can afford to make concessions. While a strike is considered unlikely, both sides are bracing for tough negotiations.
Settles also said Ford is is “one of the most decent companies to negotiate with”. An agreement with one typically sets the template for the others, keeping pay and benefits close to parity. Him and his team orchestrated the whole thing in order to help Fiat re-enter the U.S. market, as well as to give the Italian group better access to the premium segment where Chrysler and Jeep play quite nicely at the moment.
“It all depends on how they strategically set themselves up, and how it fits into any of the models we look at as we go into bargaining in 2016”. FCA is the industry’s largest buyer of emissions credits for the 2013 model year, purchasing most of its credits from Tesla.
Fiat Chrysler has about 6,500 hourly employees in the greater Toledo area.
Fiat Chrysler Chief Executive Sergio Marchionne has said since the start of talks in July he would lead the final negotiations. 45 percent of FCA’s 37,000 workers earn between $15.78 per hour and $19.28 per hour, compared to the $28.50 per hour rate paid to workers hired before 2007.
According to stats released by the Center for Automotive Research, for GM and FM the labor cost dropped from approximately 79 dollars hourly to 58 dollars, respectively 57 dollars for wages and benefits combined. 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, Dziczek said.
In the last round of contract talks covering Canadian autoworkers, the CAW, which preceded Unifor, agreed to lengthen from seven to 10 years the time it takes new hires to reach the regular hourly rate of about $34 an hour. This is expected to be tough sell to the UAW. In March, the UAW’s Williams said: “They’ve got too many damn tiers now”. “It’s impossible. It’s nearly offensive”.