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U.S. NEWSFriday 2 October 2015

UAW members reject Fiat Chrysler deal GM plans cost cuts of $5.5B

TOM KRISHER also has to protect itself to allow lower pay for en- to help finance new mobility
AP Auto Writer against a downturn in sales, try-level workers in 2007
DETROIT (AP) — Nearly two the statement said, adding when Detroit automakers TOM KRISHER
thirds of United Auto Work- that FCA looks forward to were struggling financially. AP Auto Writer
ers at Fiat Chrysler voted continued bargaining. About 45 percent of FCA’s MILFORD TOWNSHIP, Mich. (AP) — General Motors
to reject a proposed con- The union, which represents workers are paid the lower plans to cut $5.5 billion in manufacturing, purchasing
tract agreement with the 40,000 workers at FCA, now wage, while GM and Ford and administrative costs during the next three years,
company. can choose to go on strike, can’t exceed 20 to 25 per- helping to finance a big push into autonomous cars
Sixty-five percent of the return to bargaining with cent. and car- and ride-sharing services.
membership voted against the company to seek a Under the deal, pay for en- The company told Wall Street analysts Thursday that
the pact, the union said better deal, or shift its talks try level-workers would rise the savings in logistics, manufacturing, information
Thursday, sending UAW to General Motors or Ford. 31 percent to top out at technology and other costs will more than offset in-
leaders scrambling for a Union workers at all three $25.35 per hour after three creased investments in brand development and new
Plan B. They’ll meet with companies have stayed years. Top-tier workers technology.
plant-level leaders from on the job under contract hired before 2007 would GM says it will start testing a fleet of self-driving Chev-
across the nation on Thurs- extensions since Sept. 14. go from $28.50 per hour rolet Volt plug-in hybrid cars late next year at its gi-
day in a Detroit suburb to The union reached a ten- to $30 per hour during the ant technical center campus north of Detroit. It also
announced two car- and ride-sharing services that it
An assembly line worker builds a 2015 Chrysler 200 at the Fiat Chrysler Sterling Heights Assembly expects to generate added profits. The test Volts will
be summoned by employees with a smartphone app.
Plant in Sterling Heights, Mich. Nearly two thirds of United Auto Workers members at Fiat Chrysler The company also has a car-sharing program that al-
lows residents of a 479-home luxury apartment build-
on Thursday, October. 2, 2015, reject a proposed contract agreement with the company. ing in New York City to reserve SUVs and park them
in any of 200 garages in Manhattan. It also plans to
(AP Photo/Paul Sancya) launch a car-sharing service in an unidentified U.S.
city early next year.
talk about their next move. tative agreement with four-year contract. They CEO Mary Barra said GM plans to disrupt the auto in-
dustry in new forms of mobility.
The rejection is a slap at the company two weeks haven’t had raises in more Product Development chief Mark Reuss said the au-
tonomous car tests aren’t being announced just to
President Dennis Williams ago that includes pay than a decade, although get media attention. “We’re not doing this as a pub-
licity stunt,” he said.
who pitched the deal as raises, the potential for in- they have received profit- The self-driving car experiment is an effort by GM to
match Google, which has a fleet 48 robot cars that
a fair way to compen- creased profit sharing and sharing checks. have logged more than 2 million miles on private
tracks, highways and city streets near the company’s
sate workers yet keep the a $3,000 signing bonus. But Union workers made con- Mountain View, California, headquarters. Apple also
is testing its own autonomous vehicles, and Uber has
company competitive in a some members objected cessions in recent con- created a lab in Pittsburgh to develop them.
GM President Dan Ammann told analysts that the
global auto market. because the raises don’t tracts to help struggling au- personal car ownership model will remain in place for
“quite some time.” But GM is experimenting with au-
In a union statement, Wil- bring an end to a two-tier tomakers return to health. tonomous cars “so we’re right there every step of the
way,” once that model changes.
liams said he doesn’t con- wage structure in which But now all three are mak- No company in or out of the auto industry has solved
all the technical obstacles to autonomous cars, nor
sider the vote a setback workers hired after 2007 ing money, and members can they claim leadership, Reuss said. GM sees an op-
portunity to lead as it works with partners to develop
because it’s part of the are paid less than veteran want a bigger share. better sensor technology that can handle heavy fog
or ice patches, artificial intelligence that can predict
contract process. “The ul- employees. The contract But companies are fear- driver behavior and prepare for real-world problems
and precision mapping to guide the cars, he said.
timate decision and the also allows the company ful of raising their labor “We have already developed a lot of this enabling
technology because we saw this coming,” Reuss told
power of the union is our to shift some car produc- costs so that they’re not the analysts.
GM also announced that it would be the first in the
members, and they make tion to low-wage Mexico, competitive with foreign auto industry next year when it reveals technology to
weld aluminum to steel. That will help GM further re-
the final decision,” he said. replacing it with new trucks automakers that have duce weight in its vehicles. The company also predict-
ed a 31 percent reduction in battery costs for electric
Fiat Chrysler said it was dis- and SUVs that carry higher U.S. factories. “It’s a tricky cars that could speed price reductions. Currently its
battery cost per kilowatt hour is $145, but that will drop
appointed in the vote be- price tags to cover higher balance,” said Kelley Blue to $100 by 2018, a reduction that could make the cars
more competitive with internal combustion engines.
cause bargainers for both U.S. wages. Book Senior Analyst Karl GM now sells the Chevrolet Volt, which can go about
40 miles on battery power before a gasoline genera-
sides worked days and Workers said they voted Brauer. “An increase in tor kicks in. It also has promised to roll out the Chev-
rolet Bolt, a $40,000 fully electric car with a 200-mile
nights on an agreement “no” because the deal UAW pay and benefits ab- range, in late 2016. The company also said during its
annual investor presentation that global growth ini-
“that would adequately didn’t give lower-tier work- solutely makes sense right tiatives will increase earnings per share to $5 to $5.50
next year.q
reward the commitment of ers a path to reaching now, but if the cost to au-

our workforce while ensur- the top wage of $28.50 tomakers is too high it will

ing the company’s contin- per hour. They also said likely drive domestic vehi-

ued success.” While work- the contract doesn’t cap cle production outside the

ers should be rewarded in the number of second-tier U.S., and it could set them

good times, the company workers. The UAW agreed up for financial risk.”q