Negotiators from the United Auto Workers union and Fiat Chrysler worked into the morning Tuesday trying to hammer out a new labor deal that could give more than 100,000 factory workers their first raise in a decade.
The contract had been set to expire at 12:01 a.m. Tuesday. But the two sides agreed to a series of hourly extensions.
UAW spokesman Brian Rothenberg said at 6 am ET that most of the negotiators were still working. Fiat Chrysler CEO Sergio Marchionne passed up the Frankfurt auto show to be at the talks.
The union represents 140,000 hourly workers at Fiat Chrysler, General Motors and Ford Motor. The UAW is trying to reach a deal with Fiat Chrysler first and then use that contract as the basis for subsequent deals at GM and Ford.
Veteran union members get about $28 an hour but haven’t gotten a raise in their hourly wage since 2005. And their benefits and job protections have been weakened because of last decade’s problems in the auto industry.
But U.S. car sales are now nearing record levels and the traditional Big Three are profitable again. The workers want raises.
About 40,000 of the hourly workers have been hired since 2007 and are paid on a lower wage scale, and without the same health and retirement benefits, as the veteran workers. Pay for those workers tops out at about $20 an hour. The union has said it wants to eliminate or at least narrow the gap between the two tiers of workers.
Fiat Chrysler uses more of the lower paid workers than either Ford or GM, but Marchionne has said publicly he doesn’t believe the two tiers are sustainable.
“There can’t be two classes for people who do the same work,” Marchionne reportedly said in January. “It’s impossible. It’s almost offensive.”
If the two sides can’t reach a deal, a strike is possible, but most expect any walkout to be very short. The last strike by Chrysler workers in 2007 lasted less than seven hours.