Fiat Chrysler Automobiles workers have a new labor contract.
Almost five months after talks officially launched with ceremonial handshakes between the UAW and FCA, the company’s U.S. workers OK’d a new four-year deal, following approvals of similar agreements at General Motors and Ford. The contract covers an estimated 47,200 workers.
The UAW said the deal was ratified by 71% of the voting members — 74% hourly, 59% skilled trades and 67% of the salaried-worker bargaining unit. Voting started Friday and wrapped up Wednesday, which should allow FCA workers to get their bonuses — $9,000 for traditional and $3,500 for temporary workers — in time for Christmas, according to the union.
The deal’s highlights include:
- Pledges of $9 billion in investment and 7,900 jobs, which includes investment and jobs numbers announced in February as part of FCA’s southeast Michigan expansion.
- Current full-time employees at top pay in four years.
- A 12.5% formula boost for profit sharing.
- Health care parity for in-progression workers and prescription drug coverage for temporary workers, who will also have a pathway to full-time status and top pay.
- Two 3% annual raises and two 4% lump sum payments
UAW President Rory Gamble recognized the efforts of the negotiating team.
“It is not easy in pattern bargaining to be the final Detroit Three contract. It means a much longer period of negotiating. Our negotiating team at the UAW and those local national negotiators were able to keep pattern and consequently negotiate a contract that will lift many lives during the life cycle of this contract. They are to be congratulated for their focus and perseverance,” Gamble said in a statement.
FCA’s Mark Stewart, chief operating officer for North America, also offered praise:
“We wouldn’t be the company we are today without the contributions of our UAW-represented workforce, and this contract recognizes and rewards their dedication in helping us achieve that success. Working with the UAW, we are pleased to have reached a new agreement that allows us to continue our record of adding good-paying UAW-represented jobs, building strong families, investing in our communities and offering exceptional vehicles to our customers.”
The vote closes perhaps the most eventful Detroit Three contract bargaining in recent memory, with a 40-day nationwide strike against General Motors and the fallout from the ongoing corruption scandal ending the union careers of ex-UAW President Gary Jones and former Region 5 Director Vance Pearson. Jones has been implicated in court filings, although not named or charged; Pearson faces six federal criminal charges, including embezzlement of union money and money laundering.
Jones took part in the ceremonial handshakes with leaders of each of the Detroit Three to launch talks in July, and his home in Canton, west of Detroit, was among those raided by federal agents in August. The scandal, which erupted into public view in 2017 with indictments of ex-FCA executive Alphons Iacobelli and Monica Morgan, widow of the former UAW Vice President General Holiefield, has increasingly raised the ire of rank-and-file workers, and led new President Rory Gamble to trumpet ethics and financial reforms.
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Despite the headlines, negotiators with the companies and union kept at it. The contract with GM set the pattern for both Ford and FCA. Even though company and UAW officials praised the contracts, they have come in for some criticism.
Erik Gordon, a law professor at the University of Michigan Ross School of Business, in a recent Free Press interview, expressed concern that the contracts do not prepare the companies for the coming changes in the auto industry.
“Neither the company or labor had the guts to get together to say, ‘OK, we’re going to stay viable. It’s going to cost you something and it’s going to cost me something.’ Now they all face the same future. They’re going to give up market share to other automakers and hope somehow they can get that back,” Gordon said in a story last week.
But the deals have also been criticized by some local UAW leaders, although for different reasons.
Mike Booth and Jim Coakley, president and vice president, respectively, of UAW Local 961, whose members work at the Marysville Axle Plant, urged a no vote in a letter to members. The plant has an uncertain future, although joint operations with FCA and supplier ZF are to continue there for two years.
“Now the company wishes to buy your vote for $9,000 to sell a little bit of your soul. In fact the old union mantra of ‘dump the lump’ should still hold today in the era of record company profits. We have an obligation not only to ourselves, but families, future generations of workers, our communities we live in and society in general,” they wrote.
The companies and union are likely to face a new reality with the next round of bargaining. The cost of developing new technologies for electrification and driver-assistance systems may push additional consolidation.
FCA itself is likely to look different. An expected merger between FCA and Peugeot-maker PSA Groupe of France is on the horizon. The new entity would become the world’s fourth-largest automaker. More details are expected before the end of the year.
Contact Eric D. Lawrence: elawrence@freepress.com or (313) 223-4272. Follow him on Twitter: @_ericdlawrence.
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