FCA’s $1 billion investment in Canada tied to government help

Editor’s note: All dollar figures in this story have been translated from Canadian currency into U.S. dollars at current exchange rates.

Unifor leaders on Sunday urged Fiat Chrysler Automobiles workers to ratify a tentative contract that includes pay raises, changes to the new-hire pay grid and plans from the automaker to invest between $1 billion and $1.1 billion in its Windsor, Ont., assembly plant.

The Windsor investment, which would lead to the production of a plug-in hybrid or battery-electric vehicle there by 2024, is contingent upon the ratification of the contract and government support, according to a letter from FCA Canada to Unifor detailing the investment plans that was included in a contract highlights brochure Sunday. Unifor President Jerry Dias indicated on Thursday that FCA was in conversations with the government on support.

“With that joint commitment, the company’s intention is to add the necessary assembly tooling and equipment to manufacture electrified vehicles for future models, currently planned for the 2025 model year,” the FCA letter reads.

More than 8,000 FCA workers represented by Unifor were set to vote virtually on whether to ratify the contract beginning at 10 a.m. ET Sunday through 9:59 a.m. Monday. Ratification meetings, held online this year due to the COVID-19 pandemic, were scheduled for Sunday morning.

‘Transformational talks’

Union leaders pitched the agreement as a historic one that helps to make Canada a “forerunner in green cars and green jobs” and contains economic provisions “as good as we have seen in decades.”

“This year’s auto talks will go down in history as a transformational moment for the Canadian auto sector,” reads a statement from Unifor’s Dias, FCA Master Bargaining Committee Chair James Stewart and National Secretary Treasurer Lana Payne.

“Years of government neglect, job loss and worker despair is quickly turning into optimism, hope and a very bright future. Canada is back in the game, in a very big way and Unifor members at FCA are a part of that.”

The plans for Windsor, which will continue to assemble FCA’s minivans, make up the vast majority of investment dollars FCA committed to under the tentative agreement. FCA’s Brampton, Ont., assembly plant will receive about $38 million in investment over the life of the agreement, including “sustainment capital for the manufacturing operations” there and a commitment to install a tempered air system.

FCA plans to continue building the Chrysler 300, Dodge Charger and Dodge Challenger through the life of the agreement and said it plans to introduce three variants of the latter two models. In their statement, union leaders contrasted the situations at Windsor and Brampton.

“This is an important vote of confidence in Windsor — an important facility facing an uncertain future due to falling minivan sales,” the statement reads. “Alternatively, declining sales are not what is facing Brampton Assembly, where vehicle sales continue at near-record highs.”

‘Good news for Brampton’

The union pitched the capital upgrades in Brampton as “good news” as it continues to “chart a path forward on next-generation products.”

The Brampton plant’s future has long been the subject of speculation. While its Charger and Challenger models remain in demand and highly profitable for the automaker, they are built on one of the oldest platforms in the industry, and it is not clear what FCA’s plans for next-generation versions of those vehicles are.

Upon ratification, FCA also plans to invest $14.4 million in its Etobicoke Casting plant in Toronto. The casting plant would begin casting on parts for the Jeep Wrangler and a nine-speed transmission.

The three-year FCA contract follows the pattern set by the recently ratified contract between Unifor and Ford Motor Co. That contract was ratified in late September with 81-percent support among voting union members.

The FCA contract includes $8,500 in bonuses, including a $5,500 lump sum payment due on Nov. 20 and two $1,500 bonuses to be paid out in December 2021 and December 2022. 

Full-time production workers at the full pay rate would also receive a four-per-cent lump sum bonus in 2021, as well as a 2.5 percent raises in 2020 and 2022. Workers would also receive a 13-cent per-hour wage increase that “reestablishes parity” between FCA and Ford assembly workers, according to the union. Additionally, the plan calls for the 20 percent wage differential between skilled-trades workers and production workers to be reinstated by 2023.

Like the Ford contract, the tentative FCA deal would shorten the wage grow-in period for new hires to eight years. Base pay percentages were also increased for each year under the contract. For instance, a new hire would earn 65 percent of the full base rate, up from 61.25 percent under the current agreement.

Retirement help

According to Unifor, FCA plans to offer a $30,300  lump-sum retirement package for up to 350 workers in early 2021, 275 of which are set aside for the Brampton plant. Allocation of the remaining packages will be discussed between the company and union at a later date, Unifor said.

FCA plans to hire up to 75 apprentices split between its two assembly plants and Etobicoke Casting. The company also confirmed plans to reverse a decision to outsource its transportation division in Windsor, according to the union.

The FCA contract also includes various changes to health-care benefits, including increased coverage reimbursement levels for vision care, higher maximums for dental care and a new annual limit of $380 for medical cannabis prescribed by a physician.

Under the agreement, Unifor and FCA’s annual business review meetings would become quarterly. The meetings would focus on “company product plans and business forecasts, including on electric, autonomous, connected vehicle and component parts development,” according to the highlights sheet. 

Should workers ratify the agreement, Unifor would begin negotiations with General Motors later this week. GM-Unifor talks will cover the automaker’s St. Catharines, Ont., engine and transmission plant and the new aftermarket parts operation at its former Oshawa, Ont., assembly plant.

FCA ratification results were expected to be known on Monday.