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Union deal reveals future products

by Bill Cawthon on

The United Auto Workers has just released details of the revised contract with Fiat-Chrysler, and it both shows large investments and points to new products — including an unexpected eight-speed transmission upgrade.

FCA-UAW-Deal-Web

There still are no specific product assignments, but the new contract does contain information about future jobs at each plant.

There appears to be a net gain of just 42 jobs over the four-year term of the contract, due to the loss of the Viper and (presumably) the five-speed automatic, only used by the Wrangler.

Warren Truck, which to give up the Ram pickup to make way for the Grand Wagoneer, takes the biggest hit: its workforce could be trimmed by 2,406 employees, but nearby Sterling Heights will gain around 1,750 jobs. Connor Avenue, which has no new product to replace the Viper, will shed 672 jobs and Kokomo Transmission Plant II will lose 450 workers.

Sterling Heights Assembly will add 1,751 jobs; Belvidere grows by 585 and Kokomo Transmission I grows by 220.

Assembly Potential total investment of $3.4 billion
Belvidere Assembly Current products and platform build out in 2016
Existing product loading in 2016 planned through the life of this agreement
Potential workforce increase of 585
Conner Assembly Current product build out in 2017; no future product has been found for the plant afterwards
Jefferson Assembly Current products continue through the product life cycle; current workforce retained
Toledo Assembly Complex (Combined) Current workforce, including positions associated with Kuka and Mobis, retained. No impact to current Complex employment levels.
Toledo North Assembly Plant Current product build out in 2016; new product from 2017 through the product life cycle
Toledo Supplier Park Assembly Plant Current product (Wrangler) build out in 2016; new product starting in 2018, planned through the product life cycle
Sterling Heights Assembly Plant Current product (200) build out in 2016; new product (Ram?) planned to start in 2018, through the life of the agreement. Potential workforce increase of 1,751
Warren Truck Assembly Plant Current product build out in 2017. New product starts in 2019, planned through the product life cycle. Potential workforce reduction of 2,406
Powertrain Potential total investment of $1.5B
Dundee Engine Plant Current production to continue through product life cycle. Launch new engine, retain current workforce.
Mack Avenue Engine Plant Continue production of engines through product life cycle, retain current workforce
Trenton North Engine Plant Production allocation and work retention; continue engines, blocks through their life cycle; launch new engine; retain current workforce
Trenton South Engine Plant Continue production of current engine through product life cycle, make upgraded engine through product life cycle, retain current workforce
Toledo Machine Plant Capacity expansion for torque sonverter (8 and 9-speed)
Current workforce retained; net zero with steering column product deduction
Kokomo Casting Plant Capacity expansion for transmission castings
Conversion of 8-speed from Generation 1 to Generation 2
New product introduction of transmission castings
Die refurbishment for all existing products
Current workforce retained; net zero with legacy product reduction/new product addition
Kokomo Transmission Plant Capacity expansion for 9-speed transmission machining and adaptation for new vehicle models
Conversion of 8-speed from Gen 1 to Gen2
Capacity expansion for 8-speed Transmission Machining and Assembly
New product introduction of Transmission Machining
New product introduction of PentaStar Upgrade (PSU) Block Cubing
Current workforce retained; net zero with legacy product deduction
Indiana Transmission Plant I Capacity expansion for 9-speed Transmission Machining and Adaptation for new vehicle models
New product introduction of Gear Machining
Potential workforce increase of 220
Indiana Transmission Plant II Capacity expansion for 8-speed Transmission Gears
Potential manpower reduction of 450 due to legacy product build out
Tipton Transmission Plant Capacity expansion for 9-Speed Transmission Assembly and Adaptation for new vehicle models
New product introduction of Transmission Assembly
Potential workforce increase of 403
Stamping Potential total investment of $315M
Sterling Stamping Increased capital investment and continued upgrades, rehabilitation
Current manpower retained
Warren Stamping Increased capital investment and continued upgrades, rehabilitation
Current workforce retained
Mopar Parts Distribution Center Operations Estimated investment of $34M
Fiat Chrysler Auto Transport (FCAT) Operations Estimated investment of $2M

While a cap on lower-paid Tier 2 workers is still missing, FCA has sweetened the pot. Tier 2 (now called “in-progression” instead of “transition”) employees get a $3,000 bonus, and have a path to the full traditional wage after eight years. A Tier 2 worker with two years seniority at contract signing will see about $44,000 in additional income by 2019 (total, not per year).

Tier 1 (traditional) hourly employees still get the two 3% increases and two 4% bonuses, but the signing bonus has been increased to $4,000. The union says this will bring the total value to about $20,000 over the life of the contract.

FCA-UAW-Tier-2-Chart-Web

There is $800 for every 1.0% in profit margin generated in North America, starting after FCA achieves 2.0% profit margin. There is no longer a cap on compensated hours, meaning the more hours the employee works, the larger the share of the profit-sharing pool.

All FCA US plants will operate on the 2015 agreement, ending some practices at the Dundee and Trenton Engine plants that were at odds with the national agreement.

The entire report can be read online at the UAW website.

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 just-auto.com, 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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