Unifor President Jerry Dias said today that negotiations with Fiat Chrysler Automobiles remain in the “preliminary stages” as the Oct. 10 strike deadline looms.
Dias, speaking with Automotive News, said Unifor is “plowing through the non-economics” with FCA right now. Discussions involving wages, pensions and investments will begin in earnest as the deadline draws closer, he said.
He said FCA has expressed concerns about the economics of the contract the union struck with General Motors last month. The deal, which likely will influence negotiations with FCA and Ford Motor Co., includes a change to the 10-year wage grow-in for new hires that will give them pay increases each year, as opposed to the three-year wage freeze instituted in the previous contract.
FCA executives have told Dias that the wage provisions could prove to be costly for the company, particularly at its Windsor assembly plant. FCA promised earlier this year that it would hire 1,200 new workers at the plant after spending about $3 billion to develop the Chrysler Pacifica and to retool Windsor for its assembly.
“They had some questions about applicability,” Dias said. "They’re frankly not thrilled with the GM pattern … But the pattern is the pattern.”
A spokesman for FCA declined comment.
Negotiations will likely center around investment at two of FCA’s Ontario plants: The Brampton assembly plant, which builds the Chrysler 300, Dodge Charger and Dodge Challenger, and the Etobicoke casting plant, which makes aluminum die castings and pistons.
Dias, FCA CEO Sergio Marchionne and others have identified the Brampton plant as being in desperate need of new investment in its paint shop in order for it to remain viable in the long-term. Any upgrade to the facility would be costly to FCA -- Automotive News previously reported that it could cost the automaker up to $1 billion.
Meanwhile, Dias said he has concerns about the long-term viability of the Etobicoke plant as FCA phases out the Chrysler 200 and Dodge Dart, which it supplies.
Dias has taken a hard-line stance on securing investment. If FCA and Unifor cannot agree to terms on new investment by the Oct. 10 deadline, the 9,750 FCA workers the union represents will be in a strike position.
One of the key concessions Unifor gave up in the GM deal in exchange for wage gains and C$554 million ($424 million U.S.) in investments was a new defined-contribution pension plan, which shifts much of the costs and risks associated with pensions away from GM and toward employees. While pattern bargaining would indicate such a provision is likely to end up in the FCA deal, Dias said he is not certain that will be the case.
"FCA doesn’t seem to have the same concerns [that GM did], but it’s way too early to tell,” he said.
Dias said about 1,700 FCA workers are on hybrid pension plans that are part defined-benefit and part defined-contribution, potentially easing the automaker’s concerns about pension costs.
Dias said he has not yet spoken directly with Marchionne during talks with FCA.
Should FCA workers ratify a new contract with the automaker in the coming weeks, Unifor would move on to negotiations with Ford.
Ford negotiations could prove to be tricky for Unifor, following comments by Unifor Local 707 President Dave Thomas this week. Thomas told Reuters that workers at Ford’s Oakville, Ontario, assembly plant would likely vote down a deal that is similar to the contract with GM.
“The framework that GM has set forward won’t ratify in Oakville,” Thomas said. “My members have huge concerns.”
He said many of the 5,000 workers Unifor represents there have taken issue with the 10-year wage grid for new hires, which remains in place under the new deal. Thomas said workers at Oakville want the grow-in shortened.
Dias said he supported his members’ “right to dissent” and said he would work to ease their concerns.
However, he defended the GM deal as an “incredible collective agreement,” pointing to the two 2-percent raises veteran workers receive, in addition to lump sum payments, a C$6,000 signing bonus and investments and product commitments.
Dias said workers at Oakville should remember where they were four years ago before the union secured a C$700 million investment in the plant. He said the Canadian Auto Workers, Unifor’s predecessor, made securing investments at Oakville its top priority in negotiations with Ford because the plant was in danger of closing.
Dias said securing products and investment, particularly at Ford’s Windsor, Ontario, engine plants, will remain the union’s top priority in negotiations with the automaker this year. The Windsor plants employ about 1,700 workers.
“What was good enough four years ago should be good enough today,” Dias said.
Reuters contributed to this report.