Negotiations between Fiat Chrysler Automobiles NV and the United Auto Workers are nearing a proposed tentative agreement that would include a $9,000 ratification bonus, two sources familiar with the situation told The Detroit News on Friday.
A four-year agreement likely will be announced Saturday, said the people who were not authorized to speak publicly on the deal. The agreement is expected to keep all assembly plants open, including Belvidere Assembly Plant in Illinois. No additional component plant closures are expected.
That is in contrast to the ratified contracts at Ford Motor Co. and General Motors Co. To address excess capacity, GM was able to close its assembly plant in Lordstown, Ohio, and two transmission plants in Baltimore, Maryland, and Warren. Ford will close Romeo Engine Plant.
Fiat Chrysler, meanwhile, is expanding its footprint. The company is opening a new assembly plant on Detroit’s east side where it previously ran an engine plant.
The agreement would follow the pattern set by the agreements at Ford Motor Co. and General Motors Co., one of the sources said. Doing so could mark a substantial increase in labor costs for the Italian American automaker.
The agreements at Ford and GM provide a pathway within four years to the top of the pay scale for all UAW-represented employees, both full-time and temporary, hired prior to the contracts’ ratification dates.
But these lower-paid production employees represent a larger portion of Fiat Chrysler’s 27,200 UAW-represented employees than at its crosstown rivals, giving it an $8 hourly labor cost advantage per employee, according to the Center for Automotive Research in Ann Arbor.
Temporary employees make up 13% of Fiat Chrysler’s U.S. hourly manufacturing workforce, which does not include skilled trades, and full-time employees with less than eight years of seniority make up 59% of it. A deal that brings these employees to higher wages could shrink the cost gap between the Detroit Three.
The expected $9,000 bonus is the same as what Ford’s full-time employees received. Permanent UAW-GM employees received a record $11,000 bonus after a 40-day strike.
The UAW intensified its talks with Fiat Chrysler last week, and negotiators have worked into the early morning hours this week, one source said. They, however, did not meet on Thanksgiving.
On Monday, UAW Vice President Cindy Estrada had issued an update to local union leaders, saying the union had made “much progress,” but still had “some difficult issues to resolve.”
Once a proposed tentative agreement is reached, the UAW will call local union presidents and chairmen to Detroit to vote to send it to the membership. Ratification votes could take another two weeks.
bnoble@detroitnews.com
Twitter: @BreanaCNoble
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