UAW turns labor-talk focus to Fiat Chrysler

Negotiators with the United Auto Workers and Fiat Chrysler Automobiles NV met Monday morning as the union shifted its focus to the automaker, a UAW spokesman said.

UAW members on Friday ratified a four-year contract with Ford Motor Co. that promises wage increases, pathways to top wages for full-time and temporary employees, no increased health-care costs and billions in investments. Now, the union must work out a deal with Fiat Chrysler, a feat experts say could be a challenge, especially given that employees there turned down a tentative agreement in 2015.

Lower-paid production workers account for a greater percentage of Fiat Chrysler's workforce than its crosstown rivals, which means bringing them to the top of the wage scale could cause the company's labor costs to increase substantially. Of FCA's U.S. hourly manufacturing workforce, which does not include skilled trades, 59% are in-progression and 13% are temporary. Ford's contract creates an 8% company-wide cap on temps and a 10% limit per plant.

Plant closures at General Motors Co. and Ford are helping to offset their increased labor costs, but Fiat Chrysler is expanding its footprint in the United States with the opening of a new assembly plant on Detroit's east side next year.

Adding to the complexities, Fiat Chrysler is in merger talks with Peugeot parent Groupe PSA. The combined company with a CEO and an effective board majority controlled by the French automaker contributes to uncertainty at the negotiations table, experts say.

Meanwhile, a federal corruption investigation into the UAW is clouding labor talks at Fiat Chrysler in particular. The government has identified Fiat Chrysler as a co-conspirator in the scandal that includes bribes and misused member dues and training center funds, raising questions about the sanctity of labor talks in 2015. Former Fiat Chrysler Vice President Alphons Iacobelli is one of 10 people convicted and 13 people charged in the investigation. The scandal also implicates the UAW's top leaders, including UAW President Gary Jones. Jones went on paid leave earlier this month. Acting UAW President Rory Gamble, who led the settlement talks at Ford, will assist with negotiations at Fiat Chrysler.

UAW Vice President Cindy Estrada last week did signal that the union is "making progress" with the automaker in a letter to local union leaders, but it came with an addendum: "While we intend to press forward to reach an agreement it is impossible to forecast how long this will take."

Fiat Chrysler's 2015 agreement has been extended indefinitely, though either party can submit a three-day termination notice, which could signal a strike.

The UAW also took a number of negotiations off its to-do list this weekend. Members at defense contractor General Dynamics Land Systems Corp. ratified a four-year agreement Saturday with 58% voting in favor of the agreement that includes job protections, wage gains and other benefits, the UAW said. General Dynamics has UAW members at manufacturing plants in Sterling Heights; Lima, Ohio; and Scranton, Pennsylvania.

On Friday, Westland's UAW Local 163 at Detroit Axle also ratified a five-year agreement with 87% support, which includes the possibility of supplying axles for Daimler Trucks North America's electric trucks, reduces the wage progression timeline, and provides time-off and 401(k) benefits.

bnoble@detroitnews.com

Twitter: @BreanaCNoble