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Published: Thu, October 29, 2015
Economy | By Melissa Porter

UAW approves new contract with Fiat Chrysler

UAW approves new contract with Fiat Chrysler

The United Auto Workers union has approved a new four-year contract with Fiat Chrysler and now will turn its attention to bargaining with General Motors. Union negotiators and FCA executives had reached an initial tentative agreement more than a month ago, however the first proposal was rejected by workers. They'll also get a variety of bonuses and profit sharing payments.

UAW President Dennis Williams has described the current agreement as one of the "richest ever negotiated".

GM in a short statement said it welcomes the move. UAW FCA US Vice President Norwood Jewell said. The ratification bonus is $3,000 at the lower level and $4,000 for the senior members.

Fiat Chrysler shares were little-changed on the New York Stock Exchange this morning, down 0.13 percent at $15.18 after the announcement.

Health care costs will remain the same as in the previous agreement with the exception of an emergency room charge or visit. These are all code words warning GM workers not to follow the pattern of their Fiat Chrysler brothers and sisters by asking for "too much". Together, the plants in Kokomo and Belvidere have nearly a third of the 40,000 Fiat Chrysler UAW members. Brian Rothenberg, a UAW spokesman, also would not comment.

While the agreement the UAW reached with FCA provides a long-term pathway to the top wage it also effectively eliminates a cap on the number of entry level workers the automaker can hire and renames them "in progression employees". UAW leaders expect stronger contract for both of them. Chrysler CEO Sergio Marchionne previous year took home a handsome $72 million-or $34,615 an hour.

Wage increases will probably be the same, McAlinden said.

The UAW will want to keep that intact. That profit - about $6.6 billion - was reduced by expenses of a record number of recalls, particularly the recall of about 2.5 million small cars equipped with defective ignition switches.

 

The union will probably want even more job guarantees and a cap on temporary workers, said Cornell's Wheaton. Fiat Chrysler was formed in 2009 after Chrysler went through a bankruptcy and a federal bailout at least partly because it had higher labor costs than nonunion automakers.

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