Fiat Chrysler Automobiles (NYSE:FCAU) has ratified a labor agreement with United Auto Workers members in Detroit. This brings an end to protracted negotiations that have lasted almost five months and approving a new four-year deal.
UAW closes negotiations with Fiat Chrysler
Fiat Chrysler is the last of the three carmakers to finalize negotiations with the UAW. The closing of the deal caps an extraordinary round of negotiations that also included a strike against General Motors (NYSE: GM) for 40 days. This was the union’s longest strike in decades, and it resulted in the resignation of UAW president following corruption allegations.
According to the union, 71% of the members ratified the deal that included 67% of salaried employees, 59% skilled trades, and 74% of hourly employees. UAW president Rory Gamble said that it was not easy negotiating to be part of the final Detroit 3 contract. He added that the union’s negotiators and the team negotiated a contract that will help in lifting the lies of members during the lifecycle of the contract.
The negotiations were also marred with corruption allegations, and General Motors lobbed a lawsuit at Fiat Chrysler. GM accused Fiat Chrysler of fraudulent negotiation practices.
UAW secures $18.2 billion in investments
Generally, the Detroit carmakers maintained most of the flexibility they had gained in recent negotiations, but little was done in terms of temporary workers and growing healthcare costs. UAW managed to secure new investments of $18.2 billion in plants as well as retention or creation of 25,400 jobs in the next four years. Interestingly it gave a go-ahead on the closure of some plants.
GM had very contentious negotiations with the union, with workers going on strike and the company closing three plants. But officials have indicated that Fiat Chrysler will see an increase in labor costs as a result of in-progression workers that benefitted greatly as part of the deal. Its deal with the union provides for permanent workers to reach the top of the pay scale in the period of the deal, but the company could use temporary workers.