Grafico Azioni Fiat Chrysler Automobiles (BIT:FCA)
1 Mese : Da Nov 2019 a Dic 2019
Union to press for better terms on new-hire pay after reaching Ford, GM contracts
By Nora Naughton
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 18, 2019).
With a new labor agreement secure at Ford Motor Co., the United Auto Workers will pivot next to negotiations at Fiat Chrysler Automobiles NV, where bargainers are expected to encounter a thornier set of issues.
The agreements reached at Ford and General Motors Co. include wage increases, changes to new hire pay and a path to full-time work for temporary workers -- terms that will be more costly for Fiat Chrysler to accept because its workforce is newer and fewer of them are earning the top wage, labor experts say.
The UAW is turning to Fiat Chrysler following a recent shake-up in its leadership ranks, with President Gary Jones stepping aside two weeks ago. The union also is grappling with a widening criminal corruption probe that has ensnared current and former leaders.
On top of that, Fiat Chrysler recently revealed a proposed merger with France's PSA Group that will draw scrutiny at the bargaining table, the UAW's acting President Rory Gamble said earlier this month in an interview.
"Fiat Chrysler is going last, so they're playing catch up," said Kristin Dziczek, an economist and labor expert at the Center for Automotive Research. "Each time the union sets a pattern, at the next company they're going try to plus it up a little bit."
The UAW has been trying to finalize new contract agreements with each of the three Detroit car makers for months. Negotiations at Ford moved swiftly after the union staged a 40-day strike at GM. The Ford talks wrapped up in three weeks, less than half the time it took at GM.
Union bargainers at Ford and GM were able to win some significant gains for members, including holding the line on employee health-care contributions and shortening the time it takes newer hires to reach the top wage, to four years from eight. The UAW will push to replicate those terms at Fiat Chrysler, which has roughly 47,000 union-represented workers at its U.S. factories.
Fiat Chrysler has historically been weakest financially of the Detroit car companies, but this time around, its profitability in North America is closer to its larger rivals.
The company has benefited from having a less-senior workforce, with nearly half of its unionized employees still not yet at the top wage of about $30 an hour, according to industry data. Additionally, it employs a higher mix of temporary workers, earning less than full-time employees.
The structure of Fiat Chrysler's workforce has kept the company's labor costs, including wages and benefits, at an average $55 an hour, according to the Center for Automotive Research -- below the average $61 an hour at Ford and $63 at GM.
The changes on temp workers and new hire pay that GM and Ford agreed to could erode Fiat Chrysler's labor cost advantage if included in its new labor agreement, Ms. Dziczek said. "If you've got an advantage, you don't want to give it up," she said. "It's going to be very, very hard for them to take that on."
Even if bargainers reach a labor deal, they still face the challenge of selling it to Fiat Chrysler's rank-and-file workers, who voted down the first contract proposal during talks in 2015.
Another issue hanging over the talks is the federal corruption investigation at the UAW, which originated several years ago at Fiat Chrysler. Some workers have said it has eroded their confidence that union leadership can deliver a fair deal. That history puts more pressure on UAW bargainers at Fiat Chrysler to at least match the deal at Ford and GM or risk members turning down the deal, said Paul Davidson, a UAW-represented truck driver at Fiat Chrysler.
"They better do this right and come up with something decent," said Mr. Davidson, who was hired at Fiat Chrysler in 2010.
Late last month, Fiat Chrysler said it would pursue a merger with France's PSA Group, Europe's second-largest car maker by sales -- a deal that would create one of the world's largest auto companies. The proposed merger could still take months to complete, but it is a topic bound to come up during talks, analysts say.
Fiat Chrysler's U.S. unit has cycled through three parent companies in the past two decades, including a failed tie-up with Daimler AG in 1998. Amid the churn in owners, the UAW has built provisions into its contracts that require the union to review any changes in corporate structure and mergers, and any new owners to accept the UAW contract.
The UAW is likely to press for firmer commitments on factory work in the U.S., especially because there is the potential for the French government, which owns a stake in PSA, to want to shore up jobs in Europe if a merger goes through, said Colin Lightbody, a labor consultant and former bargainer at Fiat Chrysler.
"One of the questions will be who is running the show here?" Mr. Lightbody said.
(END) Dow Jones Newswires
November 18, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.