Fiat Chrysler Automobiles NV and the United Auto Workers averted a strike that would have sent the union's 40,000 members walking off the job.
The union's bargaining committee made "significant gains" in reaching a tentative agreement, the union announced on its website, saying it would make details available pending the results of a vote Friday. Fiat Chrysler confirmed the accord this morning in a statement and said it can't discuss specifics.
"We heard from our members, and went back to [Fiat Chrysler] to strengthen their contract," UAW President Dennis Williams said in the union's statement. "We have made real gains and I look forward to a full discussion of the terms with our membership."
A strike would have disrupted Fiat Chrysler's production amid the company's streak of 66 consecutive U.S. monthly sales gains and clouded an auto industry that has been a rare bright spot in U.S. manufacturing, with deliveries on pace for the best year in more than a decade. A walkout may have prevented the UAW from moving on to talks with General Motors Co. and Ford Motor Co. that could yield more lucrative contracts.
"That's good news because we don't want to strike if we don't have to," said Charles Bell, president of UAW Local 1700, which represents workers at the Chrysler 200 sedan assembly plant in Sterling Heights, Mich. "As long as it's an agreement my people can deal with, it's good news."
A work stoppage would have crimped the flow of cash to the unit, which generated about $1.6 billion in net sales a week last year. Automakers book revenue when they ship vehicles to dealers, and 18 of the company's 28 North American facilities are in the U.S. At the end of September, Fiat Chrysler said it had a 76-day supply of vehicles, or about 590,503 cars and trucks.
Fiat Chrysler's UAW members had the right to strike for the first time since before the 2009 bankruptcy that led to the automaker's formation. Walkouts by the UAW have been rare for the past decade, with the last two in 2007 when workers struck GM for two days and Chrysler for six hours.
The UAW said on Oct. 1 that its members voted about 65 percent against a proposed contract that would have granted raises to all employees and narrowed the pay gap for second-tier workers. The two sides resumed negotiations after that rejection, and the union on Tuesday notified the automaker of its intention to strike if an agreement wasn't reached by 11:59 p.m. Wednesday.
The Fiat Chrysler accord, reached Sept. 15, would have boosted hourly base wages over the contract term to $29.76 at the senior tier and as much as $25.35 for the second tier, according to the UAW. The ratification bonus would have been $3,000. The automaker also had pledged to invest as much as $5.3 billion in the U.S.
At about 45 percent, Fiat Chrysler has the largest percentage of hourly workers at the second-tier wage rates.
Williams, the UAW president, sought to use the deal with Fiat Chrysler Chief Executive Officer Sergio Marchionne to negotiate similar but more rewarding pacts from the other two companies.
After top UAW executives met with leaders of local unions last week to hear the Fiat Chrysler workers' concerns, the union said it would start addressing those issues with detailed posts on the website and its Facebook page. A post Tuesday compared the $2,500 cost-of-living raises that workers would have received in the past four years, had those payments not been suspended, with the $9,000 profit-sharing checks they did receive.
Information for this article was contributed by Craig Trudell of Bloomberg News.
A Section on 10/08/2015