UAW, Fiat Chrysler reach tentative labor contract agreement

Breana Noble | The Detroit News

The United Auto Workers and Fiat Chrysler Automobiles NV have reached a tentative labor contract agreement, the parties said Saturday.

The company has committed to an additional $4.5 billion in investments over the next four years on top of $4.5 billion announced earlier this year, which in total would add 7,900 jobs, according to the UAW. Fiat Chrysler's national council will meet Wednesday to vote to send the deal for hourly production and skilled trades employees to the 37,200 UAW-FCA members. If it does, ratification votes will begin Friday.

“The pattern bargaining strategy has been a very effective approach for the UAW and its members to negotiate economic gains around salary, benefits and job security," Cindy Estrada, UAW vice president, said in a statement. "Out of respect for our members, we will refrain from commenting any further or releasing full details of the agreement until the UAW-FCA Council leaders meet and review the details."

The labor agreement is expected to include at least a $9,000 ratification bonus — the same as what Ford Motor Co. employees received, two sources previously told The Detroit News. No assembly plants will close and no additional components plant closures are expected to be announced.

"FCA confirms that the Company and the UAW have reached a tentative agreement on a new four-year contract," the automaker said in a statement. "Further details will be provided at a later date."

Negotiations intensified last week with Fiat Chrysler after UAW-Ford members ratified their contract Nov. 15. The deal with FCA came after an update Monday from Estrada saying the parties still had some "difficult issues to resolve."

UAW-FCA members in 2015 turned down an initial tentative agreement, setting up what could be another battle for ratification this year, experts say. Lower-paid production employees represent a greater percentage of Fiat Chrysler's workforce than at its crosstown rivals. Full-time employees with less than eight years of seniority represent 49% of the Italian American automaker's hourly U.S. manufacturing workforce, which does not include skilled trades. Temporary workers represent an additional 13%.

The contracts at Ford and General Motors Co. provide pathways for all employees, both full-time and temporary, hired prior to the contract's ratification date to reach the top of the pay scale within the contracts' four years. The agreements also include hefty ratification bonuses, do not increase health care costs and promise billions of dollars in investments in U.S. facilities.

GM, however, is closing an assembly plant in Lordstown, Ohio, and two transmission plants in Baltimore, Maryland, and Warren. Ford is closing an engine plant in Romeo. Fiat Chrysler, meanwhile, is expanding its U.S. footprint with a new assembly plant on Detroit's east side, which is part of the $4.5 billion investment into five Michigan plants the company announced in February. Those investments are expected to create 6,500 jobs.

During UAW-FCA talks, there had been "a few outside distractions," as Estrada in Monday's update called recent events pertaining to a four-year federal corruption investigation into the UAW that has produced 10 convictions and charges against 13 people, implicating two former UAW presidents.

GM sued Fiat Chrysler last week in a racketeering lawsuit alleging late-CEO Sergio Marchionne orchestrated a multimillion-dollar conspiracy, including bribes, that corrupted three rounds of bargaining with the union and harmed GM. Fiat Chrysler has called the claims "groundless." The UAW is not a defendant listed in the lawsuit.

The same day GM filed the suit, the UAW's executive board moved to revoke the memberships of UAW President Gary Jones and Vance Pearson, his former aide and the union's Region 5 director. Jones, who was on paid leave at the time, resigned and on Friday retired his UAW membership, though he has not been charged in the federal probe. Pearson, who also was on paid leave and has been charged in the probe, resigned Sunday.

Rory Gamble, former UAW vice president and Ford Department director, has been the acting UAW president since Jones went on leave Nov. 3. In a meeting expected to be held next week, the union's executive board must vote to determine a permanent replacement to finish Jones' four-year term that ends June 2022.

"FCA has been a great American success story thanks to the hard work of our members," Gamble said in a statement Saturday. "We have achieved substantial gains and job security provisions for the fastest growing auto company in the United States."

bnoble@detroitnews.com

Twitter: @BreanaCNoble