TOLEDO, United States: As the negotiations on a new labor contract between the United Auto Workers and Detroit’s carmakers enter their final stretch, tensions have steadily climbed in the home of Jeep.
Jeep is one of the fastest growing brands in the industry and is one of the singular successes of Fiat’s acquisition of the Chrysler Group. Sales are up 21 percent this year alone, and they make FCA US, the American arm of Fiat Chrysler Automobiles, crucial to the overall group.
FCA’s manufacturing base in Toledo, Ohio churns out more than 400,000 popular Jeep models like the Cherokee and Wrangler a year, many of them for export markets around the world.
At issue is the future of that production in Toledo — where FCA has 5,400 full-time employees — along with union demands for wage increases and efforts by FCA to cut overtime pay, according to UAW officials who asked not to be identified because they were not authorized to speak.
Time is running short for a deal. The union contracts being negotiated between the UAW and FCA, General Motors and Ford all expire at 11:59 pm on September 14.
But the union traditionally negotiates down to the wire with the Detroit Three, and is expected to make an announcement in the early hours of Tuesday morning. Lack of a deal with one carmaker would not block agreements with the others.
“We’re about where we should be,” UAW president Dennis Williams said of the negotiations with the three automakers earlier this week. But he cautioned that “somebody was going to have a real problem” if there was no settlement before the deadline passed.
“A long strike is highly unlikely, but I think some kind of short strike is possible,” said Harley Shaiken, a labor expert from the University of California-Berkeley.
There are serious differences in talks at FCA, union officials told Agence France-Presse.
Last month, in what was described as the largest turnout in the long history of the UAW’s Local 12 in Toledo, members at FCA’s complex overwhelmingly endorsed going on strike if it proves necessary.
“Every segment of our membership has sacrificed to help this company recover from bankruptcy,” Local 12 president Bruce Baumhower told the Toledo Union Journal following the vote.
“Our new hires, our seniority employees and our retirees have all sacrificed wages and other benefits for several years during that recovery effort. Now the company is experiencing record sales and record profits. It’s time that our members and retirees get some of the benefits of those profits.”
Baumhower declined to comment publicly on the contract talks during a recent interview with Agence France-Presse “because negotiations are fluid.”
However, a member of the bargaining team who asked not to be identified listed a number of sticking points and noted that the local has a history of militancy that reaches back to the 1930s.
One is overtime pay.
Most FCA plants in the US operate six days a week with three crews who each work four days a week for 10 hours a day. But the Toledo complex operates seven days a week with just two crews and a slew of temporary workers.
Management wants to expand to three permanent crews in Toledo, which means more jobs but would result in a substantial decrease in pay for workers used to earning a lot of overtime.
The union and government officials in Ohio are also pushing to expand production at the Toledo complex, which could bring in hundreds of new jobs.
Fiat-Chrysler chief Sergio Marchionne said recently that the most logical solution to rising demand is to continue to build the Wrangler in Toledo.
But he indicated that production of the rugged sports utility vehicle could move to the plant currently building the Cherokee, and to move Cherokee output elsewhere.
Losing the Cherokee would be huge blow for the union, even if the vacated Wrangler facility were then used to build a long-anticipated Jeep pickup truck.
An FCA spokeswoman said production plans are still being negotiated and nothing will be certain until the contract is closed.
“The plan still needs to get final approval before we can formally announce it,” FCA spokeswoman Jodi Tinson told Agence France-Presse.