UAW council approves tentative FCA deal, sends to a vote

(FOX 2) - The UAW has approved a tentative deal with FCA that will now head to the membership for a ratification vote.

The deal includes $9 billion from FCA in investments with a promise not to close any factories where vehicles are assembled for the next four years and a commitment to keep making vehicles at a plant in Belvidere, Illinois.

It would include a significant investment in the Mack Engine Complex on Detroit's east side that will turn into where next-generation Jeep Grand Cherokees will be made.

Full-time seniority workers would get a $9,000 signing bonus when the agreement is ratified, while temporary workers would get $3,500 bonuses. 

Fiat Chrysler is the last company to settle on a new contract with the union. GM settled Oct. 31 after a bitter 40-day strike that paralyzed the company’s U.S. factories, but Ford reached a deal quickly and settled in mid-November.

“This pattern agreement lifts all current full-time employees to top pay in four years; provides parity on health care for all in-progression employees; provides a pathway to full-time status and eventually top pay for all temporary employees; prescription drug coverage for temporary employees; a $9,000 signing bonus for traditional members and a $3,500 signing bonus for temporary members; enhanced the profit sharing formula by 12.5% and created over 7,900 jobs from over $9 billion in investment – including $4.5 billion in newly announced projects," said Cindy Estrada, UAW Vice President and Director of the UAW-FCA Department in a statement.

The $9,000 ratification bonus isn’t as much as the $11,000 that GM workers got, but it’s equal to the money paid to Ford workers. Both companies gave workers a mix of pay raises and lump-sum payments, ratification bonuses, an end to a two-tier pay scale for full-time workers and a clear path for temporary workers to go full-time.

The union also got commitments for new vehicles to be built at several GM and Ford factories.

Even if union leaders approve the deal, ratification isn’t guaranteed. In 2015, workers voted down the first deal reached with Fiat Chrysler but approved a second one.

Fiat Chrysler apparently is agreeing to the “pattern” agreement reached with GM and Ford even though the company’s CEO said earlier this month that all of the companies are in different labor circumstances. Following the same deal would cost Fiat Chrysler more because the makeup of its workforce is different. FCA has more temporary workers than either GM or Ford, and it also has more so-called “second tier” workers hired after 2007 who now make less than longtime workers.

The deal would bolster health are benefits for FCA UAW members, which have historically been less than what GM and Ford members have gotten. Lower-paid full-time employees would get the same healthcare, dental and vision benefits as top seniority workers, including no deductibles or monthly premiums. Temporary workers would also get prescription drug coverage.

The deal with Ford and GM gives pay raises to workers hired after 2007, so they reach top UAW production wages of more than $32 per hour within four years. It also gives temporary workers a path to full-time jobs within three years.

Ford has about 18,500 workers hired after 2007 who will get big pay raises with the new contract, compared with GM’s 17,000. Fiat Chrysler has over 20,000 union employees hired after 2007.

In addition, about 11% of Fiat Chrysler’s UAW workforce is temporary, while Ford has a cap at 8% and GM is around 7%.

Fiat Chrysler in past years has enjoyed a labor-cost advantage compared with Ford and GM. FCA’s labor costs, including wages and benefits, amounted to $55 per hour going into the contract talks, while they were $61 at Ford and $63 at GM, according to the Center for Automotive Research, an industry think tank. That compares with an average of $50 per hour at U.S. plants owned by foreign-based automakers.

Now the proposal will go to Fiat Chrysler Automobiles’ 47,000 union workers, and a vote by hourly and salary workers could begin on Dec. 6.

General Motors last week filed a federal racketeering lawsuit against FCA, alleging that the company bribed UAW officials to get more favorable contract terms than GM. Fiat Chrysler has called the lawsuit “meritless.”

General Motors alleges that the move, which it contends cost it billions of dollars, was aimed at forcing a merger with Fiat Chrysler that was desperately sought by FCA CEO Sergio Marchionne, who died in 2018. Last month, Fiat Chrysler announced plans to merge with France’s PSA, which will create the world’s fourth-largest auto company worth $50 billion.

The Fiat Chrysler talks could be complicated by an ongoing federal bribery and embezzlement investigation into some of the UAW’s leadership, which started at Fiat Chrysler. Many workers at the company have been suspicious of the union’s leadership since the scandal became public in 2017.

Union President Gary Jones, whose home was raided by federal agents and is implicated in the scandal, resigned from the union last week. He has not been charged but has been linked to a plot to embezzle union conference funds to buy expensive cigars, wines, rounds of golf and stays at exclusive villas. Jones lawyer J. Bruce Maffeo says all the expenses were reported in detail and never questioned by the union’s accounting department or executive board.

Vice President Rory Gamble, who negotiated the contract with Ford, is now acting president.

Information from The Associated Press was used in this report.