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Detroit 3 and UAW set for showdown over tiered wages

This week, thousands of United Auto Workers will converge on Cobo Center in Detroit for the Special Convention on Collective Bargaining, an every-four-year event that lets members tell UAW leaders what the negotiating priorities should be during contract negotiations. This is where a lot of sand and a lot of lines start coming together in preparation for contract negotiations between the UAW and the Detroit 3 automakers, which will happen later this year. Number one on the UAW agenda is the end of the two-tier wage system created in 2007 to help the automakers get through bankruptcy; veteran workers are paid the Tier 1 rate of around $29.00 per hour, new hires are paid the Tier 2 rate of between $15 and $20 and get about half the benefits of Tier 1. Tier 2 hiring has been an undoubted success for the automakers, allowing them to keep factories in the US and hire more workers. By agreement, it is capped at a certain percentage of each automaker's workforce, and while the union's ultimate position is to get rid of the dual-scale system entirely; one leader said Ford could easily afford the $335 million it would take to convert all its workers to Tier 1 out of its $6.9 billion in 2014 North American profit, and General Motors could do the same out of the $5 billion it is handing to investors through the (admittedly forced) share buyback. Other delegates say that at the very least they'd be happy with enforcement of the current caps in the new contract. The automakers, conversely, would welcome expansion of the Tier 2 ranks. Including benefits, import automakers pay workers "in the high $40 range" per hour, according to an analyst, while Ford and GM pay about $59 in wages and benefits per hour. More Tier 2 workers on the rolls would let those two companies get labor cost parity with the competition. Fiat-Chrysler pays wages closer to the imports because of special exceptions in its UAW contract that allow unlimited Tier 2 hiring; those exceptions will end on September 14 and bring FCA into line with the other domestics, unless the new contract maintains them. FCA CEO Sergio Marchionne is opposed to the two-tier system, having called it "almost offensive." One analyst says the UAW might win a sizable pay raise for Tier 2 and a small increase for Tier 1, but the keystone issue will be how the hiring matrix can help the automakers keep overall wages in line with the imports.

That thing got a Hemi? Mopar engine kits make it easier to say yes

Thanks to a new kit from Mopar, classic car owners will have an easier time dropping Hemis into their muscle cars. The kit works with Mopar's 345 and 392 Hemi engines (5.7 and 6.4 liters respectively) and with cars built before 1975. The kit will run $1,795 and has everything needed to get one of the above engines running. The parts include a power distribution system, engine computer, engine and chassis wiring harnesses, O2 and intake air temperature sensors, ground wiring and a gas pedal. The kit is also designed to work with a manual transmission, but Mopar says a transmission such as the Torqueflite 727 and 904 can be made to work with the system. As for examples of the kit in action, take a look at the Jeep CJ66 and Dodge Challenger Shakedown that Mopar revealed this week at the SEMA show. Mopar also offers a few other parts to help complete the project, including various oil pans to clear subframes, a set of headers, and accessory drives for power steering and air conditioning. All of these parts are extra cost though. You'll also need an engine, and the 345 starts at $6,070, and the 392 runs $9,335. However, if you happen to already have one from 2014 or newer, that will work, too. Muscle car fans are getting more choices for their engine conversions. Chevrolet Performance already sells crate engines with "Connect and Cruise" kits to get its engines working in classic cars. The General also offers it with more engines. However, for people who want to keep a Mopar engine in their classic Chrysler, Dodge, Plymouth, or Jeep, this is a cool new option. Related Video: Featured Gallery Mopar Hemi V8 Engine Swap Kit Image Credit: FCA Aftermarket SEMA Show Chrysler Dodge Performance Classics FCA engine swap SEMA 2016

Fiat talking with banks about buying rest of Chrysler

All that stands in the way of Fiat's total ownership of Chrysler is a 41.5-percent stake currently held by the United Auto Workers healthcare trust, but according to SFGate.com, Sergio Marchionne is currently trying to raise the capital to complete the acquisition. The article says that a deal could be completed in as soon as 12 months, and the estimate for the remaining stake could cost Fiat SpA around $2.98 billion.
With a goal of completing the deal by the end of 2014, Marchionne is said to be in talks with various banks to help finance some of the deal. According to the report, the banks have indicated a need for a stronger balance sheet, controlled debt and reserve cash.
Two things that don't seem to be on the table to get the deal completed include issuing new shares to raise the capital or selling a stake in Ferrari. Fiat started with a 20 percent share of Chrysler in June 2009, and it raised its stake up to 58.5 percent in January 2012.