Fiat Chrysler and Union conclude provisional agreement in the US

Darnell Taylor
December 2, 2019

The UAW-Fiat Chrysler National Council will meet on December 4 to go over details of the proposed deal.

The UAW announced Saturday it has reached a proposed tentative agreement with FCA.

The Italian-American carmaker, which said in February it would spend US$4.5 billion to boost output of Jeep sport utility vehicles and Ram trucks, will invest another US$4.5 billion over the course of the next four years, Cindy Estrada, a UAW vice president and head of the union's Fiat Chrysler department, said in a statement.

Fiat Chrysler and the United Auto Workers union have negotiated a tentative agreement which is to provide billions of dollars in investments and thousands of jobs, the United Auto Workers union declared on Saturday.

Fiat Chrysler Automobiles (NYSE:FCAU) was upgraded by research analysts at Exane BNP Paribas from a "neutral" rating to an "outperform" rating in a note issued to investors on Tuesday, November 12th, The Fly reports.

Fiat Chrysler has agreed not to close assembly plants during the life of the contract and to assign new product to its factory in Belvidere, Illinois, that makes Jeep Cherokee sport utility vehicles and employs nearly 3,700 hourly workers. GM settled October 31 after a bitter 40-day strike that paralyzed the company's USA factories, but Ford reached a deal quickly and settled in mid-November.

The factory officials are expected to meet next week to vote on the deal.

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Sources also have indicated that FCA's union members will receive as much as $9,000 in signing bonuses. Permanent Ford workers qualified for $9,000 bonuses.

The union also got commitments for new vehicles to be built at several GM and Ford factories. Boston Partners' holdings in Fiat Chrysler Automobiles were worth $19,837,000 as of its most recent filing with the Securities and Exchange Commission.

If approved, hourly and salary employees would vote on ratification starting Friday, the union said. The announcement of the agreement follows United Auto Workers' already concluded contract with General Motors and Ford.

In addition, about 11% of Fiat Chrysler's UAW workforce is temporary, while Ford has a cap at 8% and GM is around 7%.

It also comes almost a month after Fiat Chrysler announced plans to merge with French automaker PSA Group.

On top of that, bargainers knew they would face even more scrutiny than normal in the wake of an ongoing bribery scandal that has seen a number of union and company executives arrested, a dozen so far pleading guilty. Earlier this month, the union's president, Gary Jones, abruptly resigned in the face of allegations that he misused union funds.

This item has been updated to correct that the deal includes a promise not to close any assembly factories for the next four years, rather than not to close any factories at all for the next four years.

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