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Fiat Chrysler and UAW reach tentative labor agreement

The United Auto Workers union and Fiat Chrysler have reached a tentative labor deal, marking the last round of contract negotiations with the three big Detroit automakers.

The UAW, one of the country’s largest and most powerful labor unions, announced Saturday that negotiators had secured an additional $4.5 billion in major investments from the automaker, bringing the total to $9 billion, and will add 7,900 jobs during the four-year contract period.

The union did not provide further details on the tentative agreement, saying they would be disclosed after union leaders meet on December 4. The agreement must then be ratified by Fiat Chrysler workers.

Fiat Chrysler confirmed the tentative deal on Twitter and said details would be provided at a later date.

The deal comes after a bruising round of negotiations between the UAW and General Motors, which resulted in strike that lasted six weeks, costing the company $2.9 billion. Earlier this month, the 55,000 union members at Ford easily approved a new four-year labor deal with the automaker.

“Our UAW Bargaining Committee worked diligently, over many months, during the General Motors strike and Ford negotiations to maintain productive negotiations with FCA,” UAW Vice President Cindy Estrada said in a statement. “The pattern bargaining strategy has been a very effective approach for the UAW and its members to negotiate economic gains around salary, benefits and job security.”

The tentative agreement comes at a precarious time for Fiat Chrysler, which was sued this month by larger rival GM, which accused Fiat Chrysler of racketeering stemming from a wide-ranging federal corruption probe. Meanwhile, the automaker and Peugeot owner PSA Group are exploring a $48 billion merger that would create the world’s third-largest automaker.

Fiat Chrysler’s long-term survival may depend on closing the deal with PSA to give it the scale and efficiencies it needs to develop the next generation of electric and self-driving cars.

Unlike GM and Ford, which have been closing US plants, Fiat Chrysler is building a new plant to construct Jeeps in Detroit, adding nearly 4,000 jobs. And Fiat Chrysler has already added about 5,000 union members to payrolls in the last four years.

Fiat Chrysler laborers have been working under a contract that provided lower average labor costs than either GM or Ford workers, and the automaker has used far more recent hires who receive lower pay and fewer benefits than workers hired before 2007.

While veteran employees receive about the same pay at all three companies, only 28% of Fiat Chrysler’s hourly production workers were hired before 2007 and thus are getting that top pay. The rest are more recent hires receiving less pay and fewer benefits, or temporary workers who receive even less.

CNN

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