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FCA US, UAW Open Bargaining

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July 15, 2015—On Tuesday, Fiat Chrysler Automobiles U.S. and the United Automobile Workers officially opened negotiations on a new collective bargaining agreement with a ceremonial handshake at the UAW-Chrysler National Training Center in Detroit.

FCA US chairman and CEO Sergio Marchionne and FCA North America vice president of employee relations Glenn Shagena were joined by UAW president Dennis Williams and UAW vice president Norwood Jewell, along with 30 members of the bargaining team for the official opening of negotiations.

"FCA US and the UAW have a long standing partnership that has a proven track record of being able to overcome challenges when faced with adversity," said Marchionne. "There is a great deal of mutual respect between us, and I am confident that we have the right leadership and the right teams in place to negotiate a long-term, responsible agreement."

When the two sides met previously in 2011, FCA US was in the process of recovering from restructuring. With the support of the UAW, the 2011 agreement allowed FCA to further rebuild and grow the business. As a result, FCA US has invested over $5.7 billion in its U.S. facilities and hired nearly 15,000 hourly employees resulting in an increase of production at U.S. vehicle assembly plants from 1.2 million units in 2011 to 1.7 million in 2014.

"Our UAW members are an integral part of the success of FCA US, and they need to participate in the economic well-being of the company," said Marchionne. "It is important that we effectively come up with a compensation plan that allows union members to participate in the profit generation based on performance, while allowing us to maintain a competitive cost structure in a downturn."

Marchionne referenced the implementation of World Class Manufacturing (WCM) as having made the company’s plants more flexible, competitive and efficient.

"At the heart of WCM is a fundamental respect for the people who make up this house," said Marchionne. "This manufacturing system is organized around a principle that the experience, the intelligence and the creativity of every person contributes to our ultimate destiny."

Over the term of the current agreement, progress has been made on the implementation of WCM, a methodology that focuses on eliminating waste, increasing productivity and improving quality and safety in a systematic and organized way. With a joint commitment to WCM, the hourly workforce has provided suggestions on how to improve their jobs and their plants.

Facilities are audited on their WCM implementation progress twice a year, scoring points in 10 technical and 10 managerial pillars by demonstrating WCM know-how and competence through employee-conducted pillar presentations and a review of the projects that have been expanded across the shop floor. Scores during those audits have resulting in five U.S. plants achieving bronze statues and one silver statue since 2009.

"We go into bargaining with a desire to recognize and reward our employees for their hard work and dedication," said Shagena. "This agreement affords both parties an opportunity to protect and secure the future competitiveness of FCA US by maintaining a cost structure that allows us to continue to provide good, well-paying jobs."

As negotiations begin, Shagena and Marchionne have stressed the importance of learning from the past and not letting history repeat itself.  

"We cannot afford to be bound by convention in our quest. If we insist on going back to the antagonistic type of bargaining that was once typical of the industry, it will be disastrous," said Marchionne. "If we agree on a future that calls for our shared responsibility, I believe we can come to an agreement that allows us to continue on the road we have traveled so far.

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