UAW workers ratify FCA labor deal by broad margin

DETROIT -- Fiat Chrysler's roughly 47,000 hourly UAW workers overwhelmingly ratified a new four-year labor contract, ending the most contentious set of Detroit 3 negotiations in years.

Roughly 71 percent of workers voted in favor of the deal, the union said Wednesday.

"Every full-time production employee currently at FCA will be at top rate by the end of this four-year agreement," Cindy Estrada, UAW vice president and director of the UAW FCA Department, said in a statement. "All temporary workers now have a defined pathway to full time and top pay as well."

The FCA contract passed with a much higher margin than similar pacts at General Motors and Ford Motor Co. Roughly 54 percent of GM workers passed the deal following a 40-day strike, while the Ford contract passed with 56 percent of workers voting in favor.

“We wouldn’t be the company we are today without the contributions of our UAW-represented work force, and this contract recognizes and rewards their dedication in helping us achieve that success,” Mark Stewart, COO for FCA North America, said in a statement.

The Detroit 3 negotiations took 88 days to complete, longer than the last round in 2015, when talks with all three automakers wrapped up by Thanksgiving.

Tempers flared from the outset.

The union, angry over GM's plans to shutter four U.S. assembly plants, picked GM as its target company, calling a national strike 24 hours after the previous contract expired after accusing GM bargainers of failing to respond to their demands until the 11th hour. The strike was marked by strongly worded public accusations from both sides that the other was playing games and failing to respond to proposals in a timely manner.

After a tentative agreement was reached, a vocal minority of workers grumbled that the gains were not significant enough to warrant the 40 days spent on picket lines.

The union bargained in the midst of a crisis, as federal prosecutors moved ahead with a years-long corruption probe that, over the course of the talks, resulted in new charges and the resignation of former President Gary Jones and former Region 5 Director Vance Pearson.

Shortly after UAW negotiations began with FCA, GM filed a lawsuit accusing its crosstown rival of a conspiracy to run up GM's labor costs in a bid to force a merger.

Despite the obstacles, the union was able to negotiate deals that preserved some of the nation's best health care benefits; accelerated the path to the top wage and benefits package for newer workers; and created a more defined path for temporary workers to achieve permanent status.

The FCA deal boosts profit-sharing payouts by 13 percent and gives less-experienced hourly workers the same health care coverage as veteran employees. Full-time workers will get a $9,000 bonus check — the same as Ford workers — while temporary employees get $3,500.

The agreement calls for FCA to create 7,900 jobs with $9 billion in U.S. manufacturing investments through 2023. The figures include 6,500 jobs announced under a $4.5 billion plan to open a second assembly plant in Detroit and expand other plants in the area.

The UAW valued the deal at an extra $29,500 over four years for an average production worker, matching the economic gains in the Ford contract. Like the GM and Ford deals, FCA workers will get 4 percent bonuses this year and in 2021 and 3 percent wage increases in 2020 and 2022.

The planned investments include $7.8 billion for assembly plants, $615 million for powertrain plants and $495 million for stamping plants. Among the new commitments are $450 million for the Indiana Transmission Plant II to create up to 1,040 jobs and $160 million for Toledo North Assembly to create up to 100 jobs making plug-in hybrid Jeep Wranglers.

Colin Lightbody, a former FCA negotiator who now heads a consulting company, said the FCA contract will close the labor cost gap with its domestic rivals. FCA has had an $8-an-hour edge over GM over the past four years, compared with a $5.35 disadvantage for Chrysler in 2006.

"The elements that I thought that they would try to get more in alignment with GM and Ford were their health care, where the in-progression employees had a different plan design than the traditional employees. They brought those in line," Lightbody said. "On the profit-sharing formula, they tweaked it bit to bring it a little closer to what the GM and Ford formula is paying."