DETROIT (AP) — Fiat Chrysler CEO Sergio Marchionne canceled plans to attend the Frankfurt International Motor Show in Germany, an indication that the company may be getting close to a contract agreement with the United Auto Workers union.
FCA said Monday that Marchionne is staying in the U.S. to deal with business matters but gave no further details.
The UAW's contracts with FCA, Ford and General Motors were set to expire at 11:59 p.m. EDT Monday. Ford extended its contract indefinitely on Monday afternoon.
Harley Shaiken, a labor expert and professor at the University of California at Berkeley, said FCA and the UAW want to reach a tentative agreement before the deadline. He thinks Marchionne canceled his trip in order to be at the table in case there are any last-minute hold-ups.
On Sunday, the UAW announced that it had picked Fiat Chrysler as its target company in the contract talks. That means a deal with FCA could set a general pattern for contracts at General Motors and Ford. FCA could also be hit with a strike if negotiations stall.
All three companies officially kicked off bargaining for new four-year contracts in July. The contracts cover around 140,000 U.S. factory workers.
Kristin Dziczek, director of the industry and labor group at the Michigan-based Center for Automotive Research, said union members can expect some financial gains in this contract, since all three companies are healthy and profitable. But they have to be careful, since automakers can move their operations to lower-cost countries like Mexico if their U.S. labor costs get too high.
The union wants hourly pay raises for longtime workers who haven't had one in a decade. It also wants to close the wage gap for entry-level workers, who make about half the $29 hourly wage of veteran employees. The wage gap benefits FCA the most, since 45 percent of its hourly workers make entry-level wages. Only around 20 percent of workers at Ford and GM make the lower wage.
Marchionne has also been outspoken about wanting to eliminate the wage gap. Shaiken expects the new contracts will phase in higher wages or otherwise bridge the wage gap.
All three companies also want to stick with profit-sharing instead of increasing hourly labor costs. During the past four years, workers have gotten annual profit-sharing checks; at FCA, those bonuses totaled $9,000 per worker.
UAW President Dennis Williams and Marchionne, who greeted each other with a hug as the negotiations began in July, have both said they would consider it a failure if they can't reach an agreement and workers strike. Workers at FCA — known as Chrysler before its 2009 merger with Fiat — went on a seven-hour strike during contract negotiations in 2007 but were prohibited from striking in 2011 under terms of a government-funded bankruptcy.