Fiat Chrysler to set pattern for wages and benefits at Detroit Three

Fiat Chrysler Automobiles would be the first to to try and set a pattern for wages and benefits for more than 140,000 unionised factory workers among the Detroit Three automakers (GM and Ford being the other two), according to the company and the United Auto Workers union.

The UAW did not offer any details as to its decision to choose FCA to set the pattern for new master contracts it would later negotiate with General Motors Co (GM) and Ford Motor Co (FM).

FCA executive Sergio Marchionne had been the  most vocal among Detroit CEOs in calling for an end to the current wage system under which recently-hired UAW workers earned around 40-per cent less per hour than union veterans on the assembly line.

UAW leaders had called for narrowing or eliminating the pay gap, pointing to the robust profits from sales of the trucks and sport utility vehicles UAW members built.

If FCA and the UAW fail to come to terms, the union could strike, which would jeopardise production of FCA's highest-profit US models.

Norwood Jewell, lead negotiator at Chrysler said in messages to members that job security and pay increase were his top priorities.

The automaker was selected by the union yesterday as the lead or target company for setting the pattern for negotiations and important issues - labour costs, health care, raises as also a potential solution to end a contentious two-tier pay system instituted in 2007 that, according to members, had divided their factories, even though it helped save the industry when it was on the ropes.

Bargaining teams for the UAW and Fiat Chrysler as also General Motors Co and Ford Motor Co would continue working through today to reach a tentative deal before the contracts for all three expired at midnight. If tentative agreements were not reached by the deadline, current contracts typically would be extended with little to no controversy.

However, UAW workers had been authorised by their leaders to call for a strike at each company, if required. This comes as the first year, post-bankruptcy, that workers at Fiat Chrysler and GM would be legally permitted to strike.