Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.
Rebecca Cook | Reuters
DETROIT – Local United Auto Workers leaders from across the country on Wednesday approved a new four-year labor contract with Fiat Chrysler, sending it to their rank-and-file members for final approval.
The deal includes the Italian-American automaker investing $9 billion in its U.S. manufacturing, including $4.5 billion in previously announced investments, and the creation of 7,900 U.S. jobs over the life of the contract.
The deal, which was patterned off recently ratified deals with General Motors and Ford Motor, also includes $9,000 ratification bonuses, which would match the bonuses of Ford workers but be $2,000 less than what GM workers received after a 40-day strike against the automaker. The agreement also would improve health-care coverage for lower-paid workers, increase profit-sharing payments and includes 3% raises or 4% lump-sum bonuses each year.
Unlike the recent UAW contracts with GM and Ford, Fiat Chrysler was not expected to close any U.S. plants under the terms of the contract. However, the automaker does plan to end a joint-venture of an axle plant with a German auto supplier in Michigan. The union expects the supplier, ZF Friedrichshafen, to continue operating the plant. Current employees are expected to be offered jobs at other Fiat Chrysler facilities or at the facility with the supplier.
The UAW’s roughly 47,200 rank-and-file members with Fiat Chrysler are scheduled to begin voting on the tentative deal starting Friday. Voting is expected to end on Wednesday, two days ahead of previously expected, according to the union.
The rushed voting, according to the union, is an attempt to get ratification bonuses to union members before the holidays, if the deal is approved.
Fiat Chrysler declined to comment following the union leaders’ decision.
Ratification of the deal is not guaranteed. Fiat Chrysler workers four years ago set a new precedent by voting down an initial leadership-approved deal during the last round of talks.
Adding to the tension of the negotiations and voting are plans for Fiat Chrysler to merge with French automaker PSA Group and an ongoing federal investigation into corruption at the union that recently led to the resignation of UAW President Gary Jones and another top union official.
Jones resigned from his position and the union last month. He had been on a leave of absence since Nov. 3, days after being implicated in the multiyear investigation. Jones has not been charged by U.S. prosecutors, but federal agents raided his home in August.
The federal probe into corruption of the UAW started with Fiat Chrysler. It has led to charges against 13 people, including eight convictions of officials affiliated with the union and three Fiat Chrysler executives.
Under the deal, the union and Fiat Chrysler would dissolve a jointly operated training center that was at the center of the corruption. The nonprofit operations, as they were with GM, would be reorganized as two tax-exempt Taft-Hartley Trust Fund organizations.
Adding to the complexity of the voting, GM last month also filed a federal racketeering lawsuit against Fiat Chrysler as a result of the corruption. GM alleges it was harmed as a result of “corrupted” collective bargaining involving Fiat Chrysler leaders bribing union officials into taking company-friendly positions that resulted in unfair labor costs and operational advantages.