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The UAW's 'record contract' hinges on pensions, battery plants

DETROIT - After nearly four weeks of disruptive strikes and hard bargaining, the United Auto Workers and the Detroit Three automakers have edged closer to a deal that could offer record-setting wage gains for nearly 150,000 U.S. workers. General Motors, Ford Motor and Chrysler parent Stellantis have all agreed to raise base wages by between 20% and 23% over a four-year deal, according to union and company statements. Ford and Stellantis have agreed to reinstate cost-of-living adjustments, or COLA. The companies have offered to boost pay for temporary workers and give them a faster path to full-time, full-wage status. All three have proposed slashing the time it takes a new hire to get to the top UAW pay rate. The progress in contract talks follows the first-ever simultaneous strike by the UAW against Detroit's Big Three automakers. The union began the strike on Sept. 15 in hopes of forcing a better deal from each major automaker. But coming close to a deal is not the same thing as reaching a deal. Big obstacles remain on at least two major UAW demands: restoring the retirement security provided by pre-2007 defined benefit pension plans, and covering present and future joint- venture electric vehicle battery plants under the union's master contracts with the automakers. On retirement, none of the automakers has agreed to restore pre-2007 defined-benefit pension plans for workers hired after 2007. Doing so could force the automakers to again burden their balance sheets with multibillion-dollar liabilities. GM and the former Chrysler unloaded most of those liabilities in their 2009 bankruptcies. The union and automakers have explored an approach to providing more income security by offering annuities as an investment option in their company-sponsored 401(k) savings plans, people familiar with the discussions said. Stellantis referred to an annuity option as part of a more generous 401(k) proposal on Sept. 22. Annuities or similar instruments could give UAW retirees assurance of fixed, predictable payouts less dependent on stock market ups and downs, experts said. Recent changes in federal law have removed obstacles to including annuities as a feature of corporate 401(k) plans, said Olivia Mitchell, a professor at the University of Pennsylvania Wharton School and an expert on pensions and retirement. "Retirees want a way to be assured they won't run out of money," Mitchell said.

Jeep Gladiator was designed as an outdoor lifestyle tour de force

LOS ANGELES — It's been more than 30 years since the last Jeep Wrangler-based pickup went out of production. And it's been more than a dozen years since a modern Jeep Wrangler-based pickup concept first taunted us with its chunky bed-shaped behind. But today, America's signature off-road brand has finally unveiled the production version of a Jeep Wrangler-based pickup. And it looks, rather predictably, like a four-door Jeep Wrangler with an open box in the back. (From some angles, it also looks like a Jeep that is towing itself.) "There were some key drivers that the designers had to work around," says Timothy Kuniskis, head of Jeep North America. "We wanted to not just go after Wrangler buyers, but after truck buyers. So this vehicle had to have four doors, four real doors. But the big thing was the bed. We know our consumer, the one who will be interested in this truck, and for them, it had to be the width of an ATV and the depth of two dirt bikes, so that dictated the size of the bed." This new trucklet is called the Gladiator, which is a departure from the name of the previous Wrangler-based pickup, the Scrambler. The Gladiator name does have Jeep heritage, having been the moniker of the full-size truck the brand sold from the mid-1960s to the early '70s. Since nomenclature is key in defining product and perception, we would be remiss if we did not note the key semantic differences between the names. A Scrambler is a go-getter (or resolutely confusing.) A Scrambler is nimble and scrappy. A Gladiator, on the other hand, is about vanquishing and conquest, and is typically gigantic. A Gladiator is domineering. Having only seen the photos, it was difficult to tell how big this thing is. Luckily, we've now seen it in person, and it is indeed big, but not huge. "It's a midsize pickup, a segment that is exploding now. Tacoma is and has been the dominant player in the category, but with GM coming back in and the Ranger joining soon, and now us, we're going to see this category get to 500,000 units a year very soon," says Kuniskis. "Everything that psychologically drives a consumer to a Wrangler, there's a sub-segment of those buyers whose needs push them toward a pickup. These aren't people who are going to fill the bed with mulch and boulders. It's not a work truck. It's absolutely a lifestyle choice. These are people who are into surfing, mountain biking, dirt bikes, side-by-sides." Jeep is in an interesting position from a design perspective.

Fiat Chrysler and the UAW reach tentative labor deal

DETROIT — Fiat Chrysler Automobiles and the United Auto Workers (UAW) union on Saturday announced a tentative agreement for a four-year labor contract, a boost for the automaker as it works to merge with France's Groupe PSA. Italian-American Fiat Chrysler and PSA, the maker of Peugeot and Citroen, last month announced a planned $50 billion merger to create the world's fourth-largest automaker. The tentative agreement with Fiat Chrysler, which is subject to ratification by the union members, follows contracts that the UAW already concluded with Ford Motor Co and General Motors Co. The deal with GM followed a 40-day strike in the United States that virtually shuttered GM's North American operations and cost the automaker $3 billion. The UAW on Saturday said the contract with Fiat Chrysler included a commitment from FCA to invest $9 billion, creating 7,900 new jobs over the course of the four-year contract. Of the $9 billion, $4.5 billion was announced earlier this year, to be invested in five plants and creating 6,500 jobs. Detailed terms of the tentative agreement were not released, but they are expected to echo those under the new contracts with GM and Ford, as the UAW typically uses the first deal as a pattern for the others. "FCA has been a great American success story thanks to the hard work of our members," UAW acting President Rory Gamble said in a statement. "We have achieved substantial gains and job security provisions for the fastest growing auto company in the United States." Ratification is not a sure thing. Rank-and-file UAW members at FCA in 2015 rejected the first version of a contract. In addition, a lawsuit related to a federal corruption probe could also raise doubts among union members about the terms agreed. The federal corruption led GM to file a racketeering lawsuit against FCA, alleging that its rival bribed union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. FCA has brushed off the lawsuit as groundless. Under the UAW's deal with GM, the automaker agreed to invest $9 billion in the United States, including $7.7 billion directly in its plants, and to create or retain 9,000 UAW jobs. Ford's contract included commitments to invest more than $6 billion in its U.S. plants and to create or retain more than 8,500 UAW jobs. The deals with GM and Ford also created a pathway to full-time employment for temporary workers and left healthcare insurance coverage unchanged.