Fiat Chrysler Extends Contract With UAW as Bargaining Continues

  • Current four-year pact was set to end at midnight Monday
  • Union broke tradition to deal with weakest company first

Fiat Chrysler Automobiles NV and the United Auto Workers union agreed to extend their current four-year contract, set to expire at midnight Monday, while they keep negotiating toward a new accord.

The existing agreement will be extended on an hour-by-hour basis as bargaining continues, the union said in an e-mailed statement.

The UAW usually reaches a deal with one company first, often the strongest, in hopes of setting a template for pay and benefits for the other two Detroit automakers to follow. This year, the union bucked that tradition, choosing the weakest of the three after Fiat Chrysler laid bare its need for a merger partner.

Because Fiat Chrysler is smaller and less profitable than General Motors Co. and Ford Motor Co., the union may not get as lucrative of a deal as it could with a stronger company. By starting with Fiat Chrysler CEO Sergio Marchionne, UAW President Dennis Williams may ensure he forged an agreement that the other two companies could accept -- and make it less likely that the union would have to reach significantly different accords with GM and Ford.

The UAW has made it clear it expects to be paid back for concessions on wages and benefits that helped the companies survive lean times and two automaker bankruptcies. Union leaders contend that the companies’ strong sales mean they can afford richer contracts. While a strike is considered unlikely, both sides have been bracing for tough negotiations.

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