Fiat Chrysler on Saturday announced that it has reached a tentative deal with United Auto Workers for a four-year labor contract. The announcement follows Fiat Chrysler's merger with France's Groupe PSA that took place last month and is likely to boost the company in the future.
Union Auto Workers also confirmed that it has reached a tentative agreement with the Italian automaker. However, the agreement still needs approval from the workers.
Fiat Chrysler and Groupe PSA last month announced a $50 billion merger that will make it the fourth-largest carmaker in the world.
Deal to help Fiat
The deal once approved will help Fiat Chrysler in the future. The announcement of the agreement follows United Auto Workers' already concluded contract with General Motors and Ford.
United Auto Workers' contract with General Motors ended a 40-day strike at the company's facilities in the United States that saw the company incurring losses of more than $3 billion.
The new tentative deal with Fiat Chrysler includes a $9,000 ratification bonus and most importantly a promise of not to close any of the company's assembly factories over the next four years.
Moreover, the United Auto Workers has also taken an assurance from Fiat that it will continue making vehicles at a plant in Belvidere, Illinois and will also create a further 7,900 new jobs over the next four years.
Of the $9.5 billion, Fiat had earlier this year announced that $4.5 billion in ratification bonus and creating 6,500 jobs.
UAW acting President Rory Gamble in a statement said, "We have achieved substantial gains and job security provisions for the fastest growing auto company in the United States."
Deal likely to be finalized soon
Although the deal is tentative it is likely to get finalized soon as it awaits approval from top union leaders. Moreover, the factory-level officials too need to approve the deal.
The factory officials are expected to meet next week to vote on the deal. Following that it needs to be ratified by all 47,000 union workers of Fiat Chrysler.
Once the deal is finalized, Fiat will become the last of the big American companies to enter a new contract with United Auto Workers given that General Motors and Ford enter similar contracts in November.
United Auto Workers is known to strike deals on the similar lines as it generally uses the terms and conditions in the first deal as pattern for the others.