FCA to invest $285 million into Toledo plants under UAW pact; 100 new jobs expected

Bulk of investment in Toledo Assembly Complex will go toward equipment, training needed to build hybrid Wrangler.

By Jon Chavez / The Blade
Wed, 04 Dec 2019 23:33:29 GMT

Fiat Chrysler Automobiles will invest $285 million into its Toledo area plants under a new tentative contract reached last week between the automaker and the United Auto Workers.

On Wednesday at a meeting in Detroit, UAW local leaders who represent hourly workers at FCA plants nationwide got their first look at the tentative agreement, which was reached on Saturday, and voted to send the proposed pact on to rank-and-file members for ratification.

Voting is expected to begin on Friday and be finished by 4 p.m. on Dec. 11 so that members who are qualified seniority workers can receive their $9,000 ratification bonuses by Christmas, the UAW said. Temporary workers will get a $3,500 ratification bonus.

Voting at UAW Local 1435, which represents workers at the Toledo Machining Plant in Perrysburg Township, will be on Monday. No information was available yet regarding voting at UAW Local 12, which represents workers at Jeep in Toledo.

As part of the contract’s Product and Investment section, Fiat Chrysler has pledged to invest $160 million in the Toledo Assembly Complex’s North Plant where the Jeep Wrangler JL is being produced. Most of the investment will go toward equipment and training to build the new electric plug-in hybrid Wrangler, known as the PHEV, that will launch next year.

The new vehicle is expected to result in the creation of 100 new jobs at Toledo North.

Fiat Chrysler also will spend $120 million at the Toledo South plant to retool and maintain production of the new Jeep Gladiator (JT) pickup truck that launched in the spring. The investment will not produce any new jobs.

Lastly, the automaker has promised to invest $5 million at the Toledo Machining Plant in Perrysburg Township. The money will be spent on a new Super-Module part for the Wrangler PHEV and is expected to create 25 new jobs at the plant. Also, funds will be spent to maintain production of torque converters and steering columns at Toledo Machining.

Not in Toledo but just to the north in Dundee, Mich., is Fiat Chrysler’s Dundee Engine Plant, where the automaker will invest $10 million to maintain production of four different Pentastar engines that are used in Jeep and Dodge Ram vehicles.

Overall, the new contract creates or secures 7,900 jobs and involves $4.5 billion in new product investments and another $4.5 billion of previously announced investments that will occur over the length of the four-year contract that expires on Sept. 14, 2023.

The new agreement offers a mix of lump sums and pay raises for longtime workers, full top wages for new hires within four years and a path for temporary employees to become full-time after three years of work.

The pact also removes the previous cap on profit-sharing that limited what workers could receive to $12,000. Removing the cap adds 12.5 percent to the union workers’ profit-sharing formula, giving them $900 per 1 percent of profit margin generated in North America. That’s up from $800.

Fiat Chrysler is the last of the Detroit Three automakers to settle with the union. Workers at General Motors ratified their contract Oct. 31, ending a 40-day strike that paralyzed GM’s U.S. factories. Ford workers followed by approving a contract in November.

In a summary of the contract, the union said FCA agreed to extend a moratorium on outsourcing of jobs and will maintain its U.S. manufacturing presence through the life of the contract.

Mike Booth, president of a UAW local in Marysville, Mich., north of Detroit, said he made a plea to the leaders at the meeting to reject the deal. Although there was some dissent, the contract was approved on a voice vote, he said.

Under the contract, Mr. Booth’s factory, which makes truck axles, would be transferred by Fiat Chrysler to auto parts supply company ZF-TRW. The plant’s 800 workers are Fiat Chrysler employees and will have to transfer to jobs in Detroit.

Mr. Booth alleges that corrupt union officials who were bribed by the company agreed to the change. The union local has sued the international UAW and Fiat Chrysler in an effort to block the transfer.

The International UAW has been rocked by a bribery and embezzlement scandal that began at the jointly run Fiat Chrysler-UAW training center. Two former vice presidents who negotiated with FCA are alleged by federal officials to have taken bribes to influence contract negotiations.

The Associated Press contributed to this report.

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