Fiat Chrysler Reaches Agreement With Canadian Labor Union

Cars and Drivers

Published: October 11, 2016 8:40 am

Last Updated: January 13, 2020 2:34 am

Fiat Chrysler Automobiles N.V. (NYSE: FCAU) on Monday night reached an 11th-hour agreement with its Canadian labor union, Unifor, that dodged a strike set to begin at midnight. The four-year deal is subject to a vote by union members, currently scheduled for Sunday, October 16.

The agreement with FCA follows the pattern established by the contract deal reached in late September between General Motors Co. (NYSE: GM) and Unifor. The main union issue with FCA was further company investment in an assembly plant in Brampton, Ontario, where the company has now agreed to invest $245 million in improvements. Union president Jerry Dias also said the agreement includes a commitment by FCA to assemble a plug-in hybrid vehicle at the Windsor, Ontario, assembly plant.

According to a report at Automotive News, wage and pension provisions reflect those of the GM contract. Workers will receive a $6,000 signing bonus, legacy workers will receive a 4% raise over the life of the deal and new hires get wage increases annually for 10 years.

Unifor also agreed that FCA could place new hires in a defined contribution pension program while maintaining the defined benefit plan for legacy workers. The earlier agreement with GM requires a 4% matching contribution from the company, and it is likely, though not yet known, that the deal with FCA is similar.

That leaves only Ford Motor Co. (NYSE: F) to reach an agreement with its main Canadian labor union. The union expects to commence negotiations with Ford on Monday, October 17, with a strike deadline of October 31.

The negotiations with Ford may be a bit more contentious. The union local is said to have “huge concerns” about the 10-year wage agreement for new hires. The national union says its top priority is to get Ford to invest in the company’s two engine plants in Windsor.

Unifor represents more than 310,000 Canadian workers, of which about 23,050 work for the Detroit Three automakers.

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