Fiat and the United Auto Workers (UAW) group on Saturday declared a tentative agreement for a four-year labor contract, a boost for the auto manufacturer as it works to unite with France’s Groupe PSA.
Italian-American Fiat Chrysler and PSA, the manufacturer of Peugeot and Citroen, in October, declared a planned $50 billion merger to form the world’s fourth-largest auto company.
The tentative agreement with Fiat Chrysler, which is topic to ratification by the union members, follows contracts that the UAW already concluded with Ford Motor Co and General Motors.
The contract with GM followed a 40-day strike in America that virtually shuttered GM’s North American operations and cost the auto manufacturer $3 billion.
The UAW Saturday said the settlement with Fiat Chrysler included a commitment from FCA to invest $9 billion, creating 7,900 new jobs over the course of the four-year agreement. Of the $9 billion, $4.5 billion was declared earlier this year, to be invested in five plants and generating 6,500 jobs.
Detailed terms of the tentative settlement weren’t released, however, they’re expected to echo those under the new deals with GM and Ford, as the UAW usually uses the first agreement as a pattern for the others.
Ratification is not a sure thing. Rank-and-file UAW members at FCA in 2015 declined the first version of a settlement. As well as, a lawsuit related to a federal corruption probe may further raise doubts among union members about the terms agreed.
The federal corruption led GM to file a racketeering case against FCA, alleging that its competitor bribed union personnel over many years to corrupt the bargaining process and gain benefits, costing GM billions of dollars. FCA has shrugged off the case as groundless.