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Local UAW leaders recommend membership approve FCA contract

DETROIT — Union leaders from Fiat Chrysler factories are sending a new four-year contract to a membership vote. The 47,000 members of the United Auto Workers union at the company will vote on the deal starting Friday. Local leaders assembled on Wednesday in Detroit to go over the pact, which includes a $9,000 bonus per worker upon ratification. The company also has promised $4.5 billion worth of new investments in U.S. factories. The union reached agreement with Fiat Chrysler last weekend. The new contract also offers a mix of lump sums and pay raises for longtime workers, full top wages for new hires within four years and a path for temporary employees to become full-time after three years of work. The Fiat Chrysler contract also adds 12.5% to the union workers' profit-sharing formula, giving them $900 per 1% of profit margin generated North American. That's up from $800, and a $12,000 cap was lifted. The UAW says the deal created more than 7,900 jobs, including a $4.5 billion investment previously announced at two factories in Detroit. Fiat Chrysler is the last of the Detroit automakers to settle with the union. Workers at General Motors ratified their contract Oct. 31, ending a 40-day strike that paralyzed GM's U.S. factories. Ford workers followed by approving a contract in November. In a summary of the contract, the union said FCA agreed to extend a moratorium on outsourcing of jobs and will maintain its U.S. manufacturing presence through the life of the contract. The $9 billion of factory investment includes $4.5 billion previously announced at two factories in Detroit, including a new assembly plant. Also included is an agreement to build fresh models off the Jeep Cherokee SUV underpinnings and invest $55 million into the Belvidere, Illinois, assembly plant, where the Cherokee is built. At the Toledo, Ohio, North Assembly plant, which builds the Jeep Wrangler SUV, the company will invest $160 million and hire 100 more people to build a plug-in hybrid version of the Wrangler. The Toledo South plant gets $120 million to keep building the Jeep Gladiator pickup. At an assembly plant in Sterling Heights, Michigan, Fiat Chrysler will invest $210 million to keep building light-duty Ram pickup and new high-performance version of the truck. Another truck plant in Warren, Michigan, will get $2.8 billion including engineering and development expenses to keep building the Ram pickup and a new three-row SUV called the Wagoneer and Grand Wagoneer.

Fiat Chrysler profit up as it closes in on retiring its debt

MILAN — Fiat Chrysler Automobiles reduced its debt by more than expected in the first quarter, putting the carmaker well on course to become cash positive later this year. Chief Executive Sergio Marchionne expects to cancel all debt during 2018 — possibly by the end of June — and generate around 4 billion euros ($5 billion) in net cash by the end of the year. Marchionne has said that forecast does not include any one-off measures, nor the impact of the planned spinoff of parts maker Magneti Marelli, which he hopes to execute by early 2019. The world's seventh-largest carmaker said on Thursday net debt had fallen to 1.3 billion euros ($1.6 billion) by the end of March, well below a consensus forecast of 2.6 billion euros in a Thomson Reuters poll of analysts. FCA said capital spending fell 900 million euros in the quarter due to "program timing," which analysts said implied higher investments for the rest of the year. The Italian-American group said first-quarter operating profit rose 5 percent to 1.61 billion euros, below a consensus forecast of 1.74 billion, as a weaker performance from its North American profit center weighed. Shipments there were higher due to the new Jeep Wrangler and Compass models. But currency moves hit revenues and earnings, and costs related to new product launches added to the pressure. FCA's shift to sell more trucks and SUVs boosted margins yet again in North America to 7.4 percent from 7.3 percent in the same quarter a year ago, although they were down from the 8 percent recorded in the preceding three months. Marchionne, preparing to hand over to an internal successor next year, is close to his goal of ending a margin gap with larger U.S. rivals General Motors and Ford. The 65-year-old has said becoming debt free and being able to compete on a par with U.S. peers would mean FCA no longer needed a partner to survive and could well succeed on its own. The CEO has previously said tying up with another carmaker would help to meet the huge costs in an industry investing in electric vehicles and automated driving. FCA shares fell immediately after the results, but recovered to trade up 3 percent at 19.71 euros by 1150 GMT, outperforming a 0.4 percent rise in Europe's blue-chip stock index. ($1 = 0.8214 euros) Reporting by Agnieszka FlakRelated Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

SRT Viper plant idled over slow sales [UPDATE]

The SRT Viper is taking an extended production break later this spring while the factory copes with low demand and gears up for the 2015 model year. Chrysler will idle the Conner Avenue Assembly Plant from April 14 to June 23, and 91 employees there will be laid off during that time. Sales have been slow so far this year, with just 91 Vipers sold in the first two months of 2014 (591 were sold all last year), according to The Detroit News. According to Chrysler, this is all part of the plan for the Viper. The automaker says that the Connor Avenue factory was meant to fluctuate in this way because it only builds one vehicle, and the sports coupe was never meant to be a mass-production vehicle. The company claims that idling the plant will allow it to manage showroom inventories. "Customer and dealer demand for the SRT Viper continues at expected levels," said Chrysler spokesperson Dianna Gutierrez to The Detroit News. SRT hasn't revealed what changes are planned for the 2015 model. This isn't the first time we've heard of the Viper's weak demand. As of October 2013, SRT had hoped to build around 2,000 examples, but only about 1,000 had been made. At that point, officials then revealed production would likely be scaled back. We've contacted the Chrysler for further information, and we'll update this post if and when we hear back. UPDATE: Chrysler has passed along this official statement regarding the plant idling: Chrysler Group confirms that its Conner Avenue Assembly Plant will be down, beginning the week of April 14. Production will resume the week of June 23. Ninety-one UAW-represented employees will be laid off during this time. The SRT Viper is a hand-crafted American exotic car that is designed for a specific consumer that values performance, style and exclusivity. It has never been intended to be a mass-production vehicle as less than 29,000 vehicles have been produced in the past 20 years. The ability to increase and decrease production at the Conner Avenue Assembly Plant allows the company to continue to meet our customers' desire to keep these special cars exclusive. We will be able to take advantage of this transition to manage dealer inventories.