CLOSED

UAW contract talks shift to Fiat Chrysler Automobiles after Ford workers ratified their tentative agreement. (Photo: Kimberly P. Mitchell, Detroit Free Press)

Downstairs. One to go.

With the ratification of a tentative agreement by Ford workers Friday night, the focus of the UAW's contract talks with the Detroit Three could be shifted to Fiat Chrysler Automobiles.

Things could go smoothly. Or not.

Both sides have already witnessed a range of opportunities leading to ratification – a 40-day General Motors strike versus three days of focused negotiation between Ford and the UAW ahead of a tentative deal.

UAW negotiations with the FCA should fall somewhere in between.

The FCA and UAW negotiators have already met, and the two sides have made statements in which they emphasize this effort without shedding much light on how far apart they may be from agreement.

The possibility of a strike remains, but as UAW President Rory Gamble said recently, he does not negotiate for that purpose. Rather, "it's a trigger you pull when you hit the wall and you can't do more."

UAW President Gary Jones, now on leave after being involved in the federal corruption scandal, is shaking hands with FCA North America Chief Operating Officer Mark Stewart at FCA headquarters in Auburn Hills while leadership groups from both sides began contract negotiations in July . (Photo: Junfu Han, Detroit Free Press)

Several workers told the Free Press that they do not envision a strike against the FCA, but these workers also said they have clear expectations of any tentative agreement, including a ratification bonus that is higher than previous FCA contracts (traditional workers received $ 4,000 in 2015) and a reasonable wage increase. Fixed GM workers receive $ 11,000 with their deal, but several FCA staff noted that they had to strike for it. Ford permanent workers receive $ 9,000.

The workers also know that the FCA has experienced solid growth and profits in recent years driven by the United States' thirst for pickups and SUVs, despite a small loss in the last quarter. The FCA, including the Chrysler predecessors, was long considered the weakest of the Detroit Three, but has benefited from the previous shift from small passenger car production in North America, and the Ram 1500 now sells the Chevy Silverado.

The fist survives & # 39;

"They're making money right now, surviving the fist, so I don't see them disturbing the apple cart too much," said Kenneth Mefford, a third-generation autoworker at FCA's Warren Truck Assembly. "They know that UAW is not going to change what Ford and GM got just for Chrysler. They are stuck with what the other two got within reason."

This pattern, established first with GM and then with Ford, means that the FCA must account for expectations influenced by dealers from car companies with different realities. FCA's increased reliance on temporary agents, for example – 4,800 compared to 4,100 at GM and 3,400 at Ford from last year – means the company would be more sensitive to the impact of contract changes affecting temporary workers.

"(Any) increase for these people will disproportionately affect FCA's labor costs," said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, noting how expectations have been set. "Negotiating with patterns is" me too. "We want what they got and maybe some more."

Colin Lightbody, a former director of labor economics for the FCA who is now president of HR & Labor Guru , a Windsor consulting firm, said companies can find ways to offset those contract changes.

"It is often difficult to change the economy of the pattern, but there may be some opportunities to refine some of the operating items," for example, by increasing the use of temporary workers, he said.

The FCA has had an explosion of hires since 2009, the year Chrysler went out of business, and went from 24,421 to 47,200 hourly and salaried employees at the end of December. But so-called in-progression employees – permanent workers hired since the end of October 2007 – represent another class of workers with significant differences in wages and benefits from traditional workers.

This highlights how the company would be more sensitive to improvements for lower-paid workers, which has helped it maintain a n per hour labor advantage over GM and Ford. However, that hiring also shows the message that the company wants to grow, with $ 8 billion in announced investments compared to the $ 5.2 billion commitment in 2015. A massive expansion in Detroit includes, for example, a new Jeep SUV assembly plant, and the estimated creation of nearly 5,000 jobs.

So, while GM helped fuel the rage by announcing what was plant closure in Lordstown, Ohio; Warren; and the Baltimore area, the FCA has been able to direct investment in the United States.

Merger effect

But the recently announced merger proposal between French carmaker PSA Groupe, which owns Peugeot and the Citroen brands, is expected to make job security more of a focus in the talks than it might otherwise have been. The announcement of a merger partner provides some certainty in the development of the automotive industry for a company that has long been seen to be on the market, but it also raises questions.

"I would expect PSA's stakeholders, including the French government, to lobby to protect their European footprint, so I would assume that the UAW would be interested in having discussions about job security and future product commitments," Lightbody said.

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Mens the scale of the unit would make it the fourth largest automotive group in the world and companies say they could save $ 4.11 billion (€ 3.7 billion) annually without plant closures, some workers worry they will be in violation of his colleagues in Europe. One described the effect as a whipsaw, saying that the company and the union would try to convince workers to accept a bad deal or see jobs being sent away.

Erik Gordon, a law professor at the University of Michigan's Ross School of Business, also suggested another potential outcome.

"Workers should worry about the possibility of an FCA-PSA combination resulting in the import of PSA cars that replace tired, low-selling Chryslers and Dodges," Gordon said.

Others, however, have said the FCA's US workforce should be largely isolated from any mergers associated with the merger because workers here make the vehicles, jeeps and frames, which generate most of the profits for the automaker.

A worker at the Belvidere Assembly Plant in Illinois who asked that the surname not be used said stability is his biggest concern.

"Job security is well on the way. I know the auto industry is declining. It is a given. We lost a shift back in May, and I know sales (of the Jeep Cherokee) are still going down a bit," he said. "I feel safe, but I still know it's going to be cut somewhere."

Corruption clouds talks

Brian Keller, who works at FCA's Mopar Sherwood distribution center in Warren, said he expects the sides to come to an agreement and for FCA workers to finally ratify an agreement, even though he hopes they reject it as they did at the beginning of 2015. He is concerned about what auto workers have lost in previous contracts, from cost of living to pension benefits, and he wants to see a tentative deal that dismantles the tier system.

Keller, who was one of the named plaintiffs in a lawsuit filed against the FCA and UAW for allegations of collaboration between then-FCA and UAW officials related to negotiations, is also focused on corruption. The scandal, which has led to charges against 13 people, including the one-time leading Labor negotiator for the FCA and ex-UAW vice presidents, continues to weigh the minds of workers who must ratify a deal.

The late Fiat Chrysler Automobile CEO Sergio Marchionne, left, and then United Auto Workers President Dennis Williams squeezes during a ceremony to mark the opening of contract negotiations in 2015. (Photo: Paul Sancya, AP)

Specifically, they remember the notorious squeeze at the start of talks between the late Sergio Marchionne, former FCA CEO and ex-UAW President Dennis Williams, who has been implicated but not charged in the scandal.

Acting UAW President Gamble has been credited for his announcement on ethical reforms in the Union, but the stench of scandals is not easily eliminated and it affects how ranking and file viewing their union negotiators. Workers may ultimately vote yes on ratification, but more than a few may be concerned.

"Right now, I don't trust them, but I have to," said Jim, the Belvidere worker.

Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Jamie L. LaReau contributed to this report.

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