Strike Avoided As UAW, Fiat Chrysler Come To Tentative Agreement

DETROIT (CBS DETROIT/AP) - Fiat Chrysler has avoided an expensive strike at its U.S. plants after reaching a tentative labor agreement with the United Auto Workers union.

UAW announced the agreement just after 11:59 p.m. Wednesday, which was the deadline the union had set to reach a new deal or possibly go on strike.

"We heard from our members, and went back to FCA to strengthen their contract," said UAW President Dennis Williams. "We've reached a proposed Tentative Agreement that I believe addresses our members' principal concerns about their jobs and their futures. We have made real gains and I look forward to a full discussion of the terms with our membership."

The Italian-American automaker confirmed it had reached a new tentative agreement with the union but said the company cannot discuss the specifics because the deal is subject to member ratification. A spokeswoman declined further comment.

Local union leaders will vote on the proposed deal Friday at a meeting in Detroit. If the leaders approve the tentative agreement, UAW will release details and the ratification process will begin, a UAW spokesman said.

Speaking to WWJ just after the tentative agreement was reached, University of California Berkley Labor Professor Harley Shaiken said there is a vast difference in the presentation of this agreement verses the first agreement.

"The roll out of this agreement is far different and I think far more constructive than the original tentative agreement; no joint press conference, no letter from Sergio Marchionne but rather a subdued statement from the company saying this is for the workers to decide," said Shaiken.

"We're seeing an unprecedented situation post-bankruptcy - a lot of pent up feelings - a lot of urgency to get something now while the companies are making money - also that balanced against the UAW's leadership placing importance on job security going forward," said Shaiken.

Shaiken says the UAW deadline was meant to focus the talks and put pressure on Fiat-Chrysler since the workers were clearly ready to walk-off the job.

"This company would not be where it's at today without our blood, sweat and tears, so at the same time, we do expect something back," one Fiat Chrysler worker outside of the Sterling Heights Assembly Plant told WWJ's Jon Hewett.

This is the second tentative agreement FCA and the union have reached. Last week, UAW members overwhelmingly rejected a previous proposal, saying it didn't go far enough in restoring benefits workers lost in previous contracts. Union workers made concessions in recent years to help struggling automakers return to health. But now that the companies are making money, members want a bigger share.

The deal rejected last week included pay raises, the potential for increased profit sharing and a $3,000 signing bonus. But members are seeking an end to the current two-tier pay structure, more specific guarantees of new vehicles for U.S. factories and a return of cost-of-living pay raises.

UAW's four-year contracts with FCA, Ford and General Motors expired on Sept. 14, but workers remained on the job under a contract extension. The union said in September it had chosen FCA as its target company in the negotiations; usually the first deal reached serves as a basic template for the other two companies.

When they kicked off contract talks in July, both Williams and FCA CEO Sergio Marchionne said they would consider it a personal failure if they can't reach an agreement and workers strike.

FCA workers haven't gone on strike since 2007, and such a move would have been expensive for the company. A weeklong strike could have cost as much as $1.7 billion in revenue and $35 million in net income, according to Sean McAlinden, chief economist for the Michigan-based Center for Automotive Research.

UAW represents around 40,000 FCA factory workers at 23 U.S. plants.

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