Sources: UAW could win work from Italy
David Barkholz
and Bradford Wernle
Automotive News -- September 26, 2011 - 12:01 am ET
Add a comment
Recommend
Sergio Marchionne: Weighing his options.
Follow Automotive News
Chrysler Group executives had planned to decide by the end of September whether the replacement for the Jeep Compass would be built in the United States or in Mirafiori, Italy.
But that decision got more complicated last week when Chrysler's current UAW labor contract was extended until Oct. 19.
Chrysler Group is pressing for a new UAW contract that would make it easier to add products and jobs in the United States, said a source familiar with the negotiations.
And there are reasons to think the company may be leaning in that direction.
In Italy, Sergio Marchionne, CEO of Fiat S.p.A. and Chrysler, has played hardball with unions, threatening to close plants and move products if unions refused his demands.
Also weighing in the UAW's favor: Many European and Asian automakers are moving production abroad because profits on U.S. vehicle sales have been shaved by exchange-rate losses stemming from the weak dollar.
The outcome of the UAW talks could affect at least two vehicle programs. Last November, Fiat said it would build the mid-sized Alfa Romeo Giulia sedan, as well as an Alfa compact SUV and the sibling replacement for the Compass, in Mirafiori.
But the plan is under review, an Italian source said, and both vehicles could end up being built in North America. Alfas would be exported to Europe.
A decision had been expected by the end of the month. The cars are due in 2014.
In a Sept. 14 letter to UAW President Bob King, Marchionne reiterated his desire to conclude an agreement so Chrysler could continue its renewal.
Chrysler has invested more than $4 billion "without knowing the outcome of these talks," he wrote.
The source said that the automaker is not requiring the UAW to meet the company's labor cost targets for the plant investments. But Chrysler is eager to limit its long-term fixed costs.
And it's making some stiff demands, although that's not unusual in the preliminary stages of a contract negotiation. The softening of extreme demands can make small concessions later seem like a union victory that helps sell the deal to members.
"The bad habits have to go away for good," the source said. For instance, the source said the company wants the UAW to accept contract language that freezes Chrysler's fixed costs, including wages and cost of living allowances, through 2019.
Chrysler also wants to be able to hire an unlimited number of entry-level workers through 2019. The UAW wants to hold the number of entry workers to 25 percent of Chrysler's hourly payroll, the source said.
More factory shifts?
The contract negotiations come after Chrysler's introduction of 16 new or revamped models in the 2011 model year.
Next year Chrysler begins the second phase of its comeback with a series of small and mid-sized vehicles built on Fiat platforms. The first is a Dodge compact sedan to be built at Chrysler's Belvidere, Ill., assembly plant that will go on sale in the first quarter.
Chrysler intends to add shifts at several U.S. plants over the next two years with a goal of boosting output to 100 percent of capacity, the source said.
The automaker's North American plants are operating at about 84 percent of capacity, according to a presentation last week by Marchionne to investors in London.
The UAW is pressing Detroit automakers to add jobs during the latest round of contract talks. In return, the union has shown a willingness to tie more hourly compensation to profits, quality and lump-sum payouts without adding to the automaker's fixed costs.
Sulla questione Mirafiori ogni giorno ne esce una nuova. Il direttore di quattroruote dava certa la produzione dei suv in Italia ma automotive news riporta delle fonti secondo le nuove alfa e jeep verranno prodotte negli States. I colloqui tra Chrysler e Uaw stanno durando piu' del previsto e non e' escluso che concedendo qualcosa gli americani riescano a portarsi a casa l' alfa Giulia, la compass e l'alfa suv. Una situazione tragicomica.
Iscriviti
Login
FAQ
Cerca
) d'altra parte pero' il sindacato uaw ha dovuto subire tagli enormi negli ultimi anni quindi e' anche logico che combatta per migliorare la posizione dei propri iscritti quando le big 3 fanno di nuovo soldi. In piu' un'altra doccia fredda per il maglionato sta per arrivare da Washington: chrysler aveva chiesto dei fondi per lo sviluppo dell'auto elettrica e sperava di ottenere 3 miliardi di dollari ma gm ha gia' rinunciato e quei fondi saranno dirottati verso i rimborsi per le popolazioni colpite dagli ultimi uragani.
