Fiat Chrysler, Union Avert Canada Strike With Tentative Deal -- Update

By Paul Vieira in Ottawa and Nora Naughton in Detroit

Fiat Chrysler Automobiles NV and the union representing about 9,000 workers at its three Canadian factories reached a tentative agreement late Wednesday night that incorporates a billion-dollar-plus investment in the auto maker's assembly plant in Windsor, Ontario.

Unifor, the Canadian union, said the tentative deal is a three-year agreement, which addresses demands it had on wages and health benefits. More important, Unifor President Jerry Dias said, the negotiations envisage the hiring of an additional 2,000 workers after Fiat Chrysler pledged to invest up to 1.5 billion Canadian dollars, or the equivalent of $1.14 billion, in the factory.

Mr. Dias said with the investment, the factory will continue to produce minivans and launch, starting in 2024, production of either a plug-in hybrid or battery-powered vehicle.

"This is a huge commitment to our plant, and our members. This will be a home run for the community of Windsor," he said. Fiat Chrysler last year unveiled plans to eliminate a third shift at the Windsor plant, which put 1,500 people out of work.

A Fiat Chrysler spokeswoman confirmed it reached a tentative deal with Unifor but would refrain from releasing details until a later date. Unifor members are scheduled to vote on the agreement on Sunday.

A work stoppage would have halted assembly of the company's Pacifica and Voyager minivans, Dodge Charger and Challenger muscle cars, and a Chrysler sedan. It would also stop production of aluminum die castings for several Fiat Chrysler models, including highly profitable Jeep SUVs and Ram pickup trucks built outside of Canada.

The auto maker is pushing to improve its financial performance ahead of a planned merger with France's PSA Group. The Italian-American auto maker needs to preserve cash to pay a dividend of $3.44 billion (reported as EUR2.9 billion) to its shareholders ahead of the closing of the deal early next year. That dividend was reduced last month in a cost-cutting move.

Fiat Chrysler's cash reserves have already been dented by the effects of the coronavirus pandemic; the company stopped production at its factories in Europe and North America in the spring to curb the spread of the virus. The North American business has long contributed most of the auto maker's earnings, and another work stoppage in the region would add to pressures on Fiat Chrysler's bottom line.

Unifor reached a new labor deal with Ford Motor Co. last month, which also secured a nearly $1.5 billion investment in two plants and a commitment to build electric cars at a plant near Toronto. Unifor used that agreement as a template for its talks with Fiat Chrysler.

Last year, Fiat Chrysler negotiated a new contract in the U.S. with the United Auto Workers that included wage increases and improved health-care benefits.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

October 15, 2020 12:00 ET (16:00 GMT)

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