FCA Could Be Wild Card in UAW-Detroit Three Talks

The once-close relationship between FCA US and the UAW that helped pull Chrysler Group out of bankruptcy when the automaker was headed for the scrap heap appears to be unraveling.

The latest blow is the departure of Alan Iacobelli, FCA vice president-labor relations, whose retirement was announced June 9. General Motors said the next day that Rex Blackwell, vice president-North America labor relations, retired June 1.

Iacobelli, a veteran of both the bankruptcy turmoil and the fractious labor negotiations that followed, was an old-school labor representative conversant with the UAW’s personalities and internal politics.

But his departure is only a symptom of a larger problem that is becoming more apparent ahead of next month’s start of contract talks between the UAW and FCA, GM and Ford.

In his role as CEO of FCA US, Sergio Marchionne delivered an emotional eulogy at the March funeral of retired UAW Vice President General Holifield. As head of the UAW’s Chrysler department, Holifield had been instrumental in helping Marchionne win contract concessions in 2009 and in maintaining the concessions despite criticism from more militant union members.

“Under his leadership, General helped guide the company through one of the most difficult periods in its history,” Marchionne said. “As a result, Fiat Chrysler was able to provide a secure future for those who chose to stay and for the nearly 15,000 new UAW-represented employees that have joined the company since June 2009.

“He was a champion of the company’s efforts to transform the culture within our manufacturing facilities, which has resulted in significant improvements for our employees and our products. When he retired in November 2013, he left Fiat Chrysler better positioned to compete in a global marketplace.

“He was one of our own, and his mark will be forever present across the assembly lines in all of our U.S. facilities,” Marchionne said.

UAW-FCA Relations Fray Under King

Holifield’s retirement came amid rising tensions between the union and Marchionne, and then-UAW President Bob King had come to view Holifield and his close relationship with the CEO as something of liability.

Holifield could be tough on union dissenters, particularly those who complained about the abandonment of traditional work rules and rotating schedules required by Marchionne’s World Class Manufacturing System.

In March 2013, King overruled Holifield and demanded Chrysler management reinstate a worker fired after a protest over implementation of an alternative work schedule at the Warren, MI, truck plant. The worker whose job King saved, who asked not to be identified, says the UAW president argued he was on his own time and thus had the right to protest management decisions.

Under the system, workers are assigned to one of three shifts and asked to work 10 hours per day, four days per week, without overtime pay. Under traditional scheduling, workers would have earned $28 to $30 per day in overtime pay, or roughly $120 per week. The new system not only helps trim labor costs but also allows Chrysler to utilize plants 20 hours per day, six days a week.

“We understand and appreciate that this is a transition to a new work pattern,” Chrysler said in a statement after protests at plants in Warren and Trenton, MI, and Kokomo, IN.

Williams Not Spoiling for Fight, But …

As Chrysler Group changed its name for the fourth time in 15 years, the UAW also began to shift its strategy. Dennis Williams, the UAW’s current president, has continued the union’s effort to minimize strife and old-fashioned confrontation, which has prevailed since Ford began to reorganize in the face of a financial crisis in 2005.

At the same time, Williams has clearly stated he believes auto workers deserve a raise this year and that profit sharing, while valuable, is not a substitute for increases in hourly wages.

Last summer, Williams also sent FCA a clear message times have changed when he tapped a newly elected vice president, Norwood Jewell, to represent the UAW in the upcoming talks.

Jewell comes from a militant union tradition, having been raised around Flint, the union birthplace where he earned a reputation for toughness. He was one of the local union leaders most heavily involved in the plant-level strike that shut down all of GM in the summer of 1998.

Jewell, like Holifield, worked his way up from the shop floor to a position of authority on the strength of his political canniness and skill as a negotiator. He has been outspoken about the need for domestic automakers to build better quality vehicles.

However, Jewell had spent his whole career in the General Motors system, meaning he had only limited ties to the union’s Chrysler department as it was structured under Holifield. Jewell said after the UAW’s March bargaining convention one of his goals is to ensure FCA workers have more of an ownership stake in Marchionne’s World Class Manufacturing System.

Marchionne, meanwhile, steadfastly advocates redrawing the industry’s contracts with the union to reduce fixed compensation, such as an hourly wage, and increase the use of variable compensation such as profit-sharing and bonuses.

Unlike GM, which has mounted a well-orchestrated campaign highlighting investments of $5.4 billion in capital investment in plants around the U.S., Marchionne and FCA have held off from making specific commitments.

FCA will replace Iacobelli at the bargaining table by Glenn Shagena, who is taking over as employee relations chief for North America after serving as head of human resources at FCA Mexico. Prior to his Mexican assignment, Shagena was human resources director-Manufacturing and World Class Manufacturing and headed the rollout of WCM at all of the automaker’s production operations.

At GM, Cathy Clegg, vice president-North America manufacturing and labor relations, succeeds Blackwell as the automaker’s lead negotiator in talks with the UAW, which represents about 49,000 GM hourly workers.