In 10 years of covering UAW negotiations for Automotive News, a face-to-face conversation I had with Al Iacobelli in 2011 stands above the rest.
Iacobelli, who retired suddenly last week as Fiat Chrysler Automobiles' head of North American employee relations, had taken me through all the facts and figures on why a still-mending FCA couldn't afford to give its UAW-represented workers a raise in the upcoming negotiations.
He looked up from his papers and straight into my eyes. "I don't care what Ford and GM do. We aren't raising our labor costs this time around."
And true to his word, FCA negotiated the best contract of the Detroit 3. FCA's overall labor costs since the four-year UAW contract was signed in fall 2011 have nudged up less than 1 percent per year.
Consequently, FCA enjoys a nearly $10-an-hour labor cost advantage over Ford Motor Co. and General Motors. Its $47-an-hour cost for wages and benefits rivals that of the U.S. transplant operations of the German, Japanese and Korean automakers.
With Iacobelli's surprising departure on the eve of this year's UAW negotiations, his successor, Glenn Shagena, 52, will have to get up to speed quickly.
These negotiations promise to be especially challenging for FCA, in part, because Iacobelli, 55, did such a good job in the past two negotiations.
Back in 2009 before the Chrysler bankruptcy, the UAW agreed with FCA US (then Chrysler Group) and GM to allow the companies to hire an unlimited number of lower-paid entry-level workers now notoriously known as Tier 2.
Sensing an opening, FCA aggressively used $100,000 buyouts to get thousands of highly paid veteran UAW workers to retire.
As the industry recovered, FCA went on a hiring spree, adding about 14,000 workers at starting wages of $16 an hour instead of the $28 an hour veteran workers earned.
Shagena now faces the challenge of keeping FCA's high percentage of Tier 2 against a UAW rank and file that wants the practice ended.
