The Price of Peace: Fiat Chrysler Sees Biggest Jump in Labor Costs

Steph Willems
by Steph Willems
the price of peace fiat chrysler sees biggest jump in labor costs

Concessions made to the United Auto Workers by the Detroit Three during last fall’s bargaining talks will weigh on the automakers’ bottom lines, but none more so than Fiat Chrysler’s.

Labor costs stand to jump significantly at FCA, partially erasing the cost advantage it enjoyed over Ford and General Motors.

As reported by Automotive News, the Center for Automotive Research has mapped out the changes between the current four-year labor agreements and previous ones. The current contract sees workers showered with the expected raises and bonuses, temporary workers given a pathway to full-time employment, and healthcare coverage maintained.

GM set the standard for the agreements after weathering a 40-day strike that saw its American plants go idle, with product at its Mexican and Canadian plants drying up as parts supply dwindled.

According to CAR, hourly labor costs at Ford will rise from $61 an hour to $69 an hour by the end of the four-year contract. GM will see its hourly costs jump from $63 to $71 an hour. FCA, which made heavy use of temporary workers (and faces accusations from GM of perverting past bargaining talks with the help of bribes), sees the biggest increase in the hourly cost of labor. Its costs are projected to rise from $55 an hour to $66.

That jump places FCA just five bucks behind GM and three bucks behind Ford. Previously, the gap was $8 and $6.

As no member of the Detroit clan can claim to be cash-poor, the increases do not come as a shock. As Art Schwartz, labor consultant and past GM negotiator, told AN, “Anyone who went into this thinking the labor cost would stay the same or go down was dreaming.”

[Image: Fiat Chrysler Automobiles]

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  • Cprescott Cprescott on Jan 16, 2020

    I am all for adding as much automation to the building of vehicles as possible and to deny the UAW's ability to create a slushfund for the DNC. I have watched plenty of videos about modern car production and there are still jobs that humans do that don't need to exist. Is that being mean? No. It is being realistic. Having people who are doing a job that requires SKILLED labor is one thing. Creating jobs for the heck of it is an issue that needs to be eliminated.

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    • Highdesertcat Highdesertcat on Jan 19, 2020

      @highdesertcat golden2husky, there also something magical about automation and robotics. Remember when automated teller machines first made their appearance and all those people were phased out as ATM became common? And then there were telephone operators. Thousands lost their jobs when dialing your number became common place with the rotary dial phone. Automation is a wondrous thing. That's being progressive in the real sense, for the betterment of society because machines can work 24/7 with little or no drama, and with a great deal more accuracy and precision. Unlike human beings. Remember that necessity is the mother of invention -- if human employees had not been so problematic for employers there would never have arisen a need for automation to take their place.

  • Indi500fan Indi500fan on Jan 16, 2020

    When GM goes bankrupt the next time, the UAW better hope there's a Democrat in the White House again.

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    • JimZ JimZ on Jan 17, 2020

      the bailouts started under Bush, you dimp. Do you also still believe Obama ordered the creation of the Chevy Volt?

  • TomLU86 TomLU86 on Jan 16, 2020

    Couple of things here: 1. Bush (GOP) initially bailed out GM and Chrysler/Cerberus. GM was going down on HIS watch. 2. CPrescott has probably never worked in a factory, let alone an auto plant. Even 50 years ago, "unskilled" (referred to as OTS or "Other Than Skilled" in auto industry) workers needed some skills, and more importantly, traits, to do mind-numbing repetitive work correctly, and some or many of them, had to have enough skill and initiative to compensate for the inevitable oversights in the car's engineering and design, and the facility where it is put together. If a task is automatable, it has, is, or will be automated. Doing mind-numbing work on a product that is expensive, costing $14,000 to $100,000 or more, and most cannot afford is probably worth more than doing unskilled work at restaurant 3. No love here for UAW leadership. Also, no love for Republicans or Democrats. The higher you go up the food chain, the less real difference there is. It's mostly about "how" you do things, and "who" gets to sit in driver's seat, and do them. To a serious, thoughtful observer of current events, and the news media, this looks like professional wrestling. 4. For you GOP lovers and Dem haters, we have cartel capitalism in the US. The Republicans will take care of big money, and then allocate the leftovers to their supporters--or tell them hard work will get them their share. To you Dem lovers and GOP haters, big money owns your party--see GOP comment. In a free society, if the workers can extract more from FCA or GM, why shouldn't they? They make possible the $25 or $50 million pay day for their CEOs. Do Asian CEOs make that much? Did Ghosn?

  • TomLU86 TomLU86 on Jan 16, 2020

    correction: GM was NOT going down on his (Bush') watch

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    • Highdesertcat Highdesertcat on Jan 17, 2020

      "correction: GM was NOT going down on his (Bush’) watch" That's right and Shrub gave GM and Chrysler enough funds until 31 Mar 2009 so the next administration could decide how to make the orderly transition and sale of these dead companies. And we also know that GM was selectively kept alive but that Chrysler was palmed off with a $1.3BILLION bribe to Fiat. What really bugged me was all the Mom&Pops that were not bailed out but were left to die on the vine. And hundreds, if not thousands of small businesses did die due to benign neglect.