Fiat Chrysler, UAW reach tentative contract deal

DETROIT – The United Auto Workers union and Fiat Chrysler have reached a tentative deal on a new contract for about 40,000 U.S. factory workers that will serve as a template for pacts with General Motors and Ford.

Terms of the deal weren’t disclosed Tuesday. Fiat Chrysler’s U.S. hourly workers must vote to ratify the deal before it can take effect.

UAW President Dennis Williams said the agreement meets the union’s goals but still keeps Fiat Chrysler competitive. Williams said he had three goals for the new four-year contract: giving entry-level workers a path to higher pay, rewarding members for sacrifices they made while Fiat Chrysler struggled financially, and dealing with escalating health care costs.

“We believe that we have met those goals, but ultimately our membership will make the final decision,” Williams said at a news conference to announce the deal Tuesday evening.

The union was seeking hourly pay raises for longtime workers who haven’t had one in a decade. It also wanted to narrow or close the wage gap for new hires, who start at about half the $29 per hour that longtime workers are paid.

The UAW agreed to the two tiers of pay when then-Chrysler was near bankruptcy in 2007. But Fiat Chrysler CEO Sergio Marchionne agreed with the UAW that tiered wages were unfair to workers. Marchionne said negotiators came up with a carefully crafted agreement “whereby that issue will go away.”

The UAW began bargaining in July with Ford, GM and Fiat Chrysler. Contracts with all three companies – which cover around 140,000 U.S. hourly workers – expired Monday night but were extended while talks continued.

Fiat Chrysler, or FCA, was picked as the lead company in the talks this year, making it the focus of bargaining and a potential strike target if talks hit a snag.

The deal with FCA came after a furious 48 hours of bargaining that included an all-night session from Monday to Tuesday. Both sides had agreed to extend the contract on an hour-by-hour basis while talks continued, even as some members called for an end to talks and a strike at FCA plants.