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Updates: Chrysler vs. UAW; Fiat vs. Italy

by Bill Cawthon on

After extended bargaining sessions, negotiators for the United Auto Workers told union local presidents they are close to an agreement on a new four-year contract with Chrysler Group. In a 20-minute meeting, UAW President Bob King said he had hoped around-the-clock negotiations would have produced a proposal by yesterday morning, but there are still some issues, including the number of lower-paid Tier II workers that can be hired and profit-sharing programs, to be resolved.

Negotiations are scheduled to resume this morning.

There has been no indication of any resolution of the controversial rotating work shifts in place at Trenton South or their pending imposition at the Global Engine Manufacturing Alliance (GEMA) plant in Dundee, Michigan. Workers at the GEMA plant had previously voted to strike over the new work schedule, which Chrysler says is important in achieving higher production without overtime. Union members have since voted to join the national contract, but it is still possible a strike could be called under special rules in their existing agreement.

Comparison of the Detroit automakers prior to 9/14/2011
  GM Ford Chrysler
United Auto Workers union employees 48,000 41,000 23,000
Average hourly labor cost for wages/benefits $56.00 $58.00 $49.00
2010 Health care costs for hourly workforce (millions) $665 $533 $522
2010 Hourly worker profit-sharing/bonus $4,300.00 $5,000.00 $750.00
2010 Revenue (millions) $135,600 $129,000 $42,000
2010 Net profit/loss (millions) $6,200 $6,600 -$652
Automotive cash as of 6/30/11 (millions) $34,000 $22,000 $10,000
Light vehicle sales 2010 2,211,091 1,931,534 1,085,211

Sources: Allpar, Chrysler, Ford, General Motors, Center for Automotive Research, Bloomberg, Automotive News

In Italy, things are heating up: Emma Marcegaglia, head of Confindustria, the Italian industry trade group, said Fiat’s departure was no surprise but a confirmation of matters covered in private discussions. She defended the recent labor accords signed by Confindustria. Marcegaglia also said membership in Confindustria is voluntary and Fiat has the right to leave, but she pointed out that Fiat had favored other actions taken by the group and that she disagreed with Fiat’s decision, saying the choice, “does not stand.”

Over the weekend, Fiat Chairman John Elkann responded, saying, “Our reasons are logical and consistent with the way we have done, and continue to do, business. The important thing right now, especially when one sees the difficulties and uncertainties, is to look to the future and invest, as we are doing, and innovate.” Elkann pointed to Fiat’s commitment, which includes new investments for the Mirafiori, Irpinia, Grugliasco and Pomigliano factories. “They are all investments in Italy.” Elkann said. He also pointed out that Fiat is the only Italian company that has made serious investments in Italian football (soccer).

in the meantime, there is already some fallout from Fiat’s announcement that it will leave Confindustria: at the end of last week, Cartiere Paolo Pigna, a leading Italian paper company, announced it, too, was leaving the group.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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