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Sergio: Two-tier wage structure eliminated in FCA deal with UAW [w/video]

The two-tiered wage structure that governs the way domestic car companies pay their unionized employees – and rankles many of them in the process – could soon be a thing of the past. In a tentative deal seen as a bellwether for other ongoing negotiations, the United Auto Works and Fiat Chrysler Automobiles reached a tentative agreement on a four-year contract that would disband the two-tier structure, in which some workers earn higher hourly wages for performing the same job, over time. Officials who announced the tentative agreement late Tuesday in Detroit were short on details of its contents and union members still must ratify it. But FCA CEO Sergio Marchionne said the two-tiered structure will disband by the end of the contract. "The team has crafted together a very thoughtful process, where the issue will go away, go away over time," he said. Further details weren't divulged. Union negotiations with Ford and General Motors are ongoing, so hammering together a deal that sheds the two-tier structure with Chrysler first could set a precedent followed by the other members of Detroit's Big Three automakers. Other key issues that emerged in negotiations with FCA included escalating health-care costs and rewarding workers for the health of the auto industry. But dealing with the two-tier structure, born as GM and Chrysler circled bankruptcy during the Great Recession, was something the UAW wanted to confront. "The UAW has a philosophy about the economic balance of this country and the inequality, and our mission is to bridge the gap in this country," UAW president Dennis Williams said. "It's gotten out of whack. ... We don't want to share anything, and I truly believe that corporations that have that set of mind have lost their way." The UAW's executive board was expected to review the tentative agreement this morning before a union membership vote is scheduled. For Marchionne, who skipped the Frankfurt Motor Show to shepherd the negotiations during their final hours, the tentative agreement means he can shift his concern back toward pushing an FCA merger with General Motors or another company and touting the idea of industry consolidation in general. "The other side of this is capital usage in this business, which is something that remains unsolved," he said. "It makes the labor side sort of pale in comparison, given the magnitude of the potential synergies and benefits we'd be deriving from an intelligent approach.

Fiat Chrysler shares get a boost after revised Stellantis merger deal with PSA

MILAN — Shares in Fiat Chrysler (FCA) rose sharply in Milan on Tuesday after the car maker and French partner PSA revised the terms of their merger deal, with FCA's shareholders getting a smaller cash payout but a stake in another business. FCA and PSA, which last year agreed to merge to give birth to Stellantis, the world's fourth largest car manufacturer, said late on Monday they had amended the accord to conserve cash and better face the COVID-19 challenge to the auto sector. Milan-listed shares in Fiat Chrysler rose almost 8% by 1000 GMT, while PSA gained 1.5%. Under the revised terms, FCA will cut from 5.5 billion euros ($6.5 billion) to 2.9 billion euros the cash portion of a special dividend its shareholders are set to receive on conclusion of the merger. However, PSA will for its part delay the planned spinoff of its 46% stake in car parts maker Faurecia until after the deal is finalized. That means all Stellantis shareholders — and not just the current PSA investors - will get shares in a company which has a market value of 5.8 billion euros. Based on Stellantis' 50-50 ownership structure, FCA and PSA respective shareholders will each receive a 23% stake in Faurecia. Analysts welcomed the 2.6 billion euros in additional liquidity for Stellantis' balance sheet as well as the increase in projected synergies to more than 5 billion euros from 3.7 billion. There was also further reassurance as the two companies confirmed they expected the deal to close by the end of the first quarter of 2021. "All told, the two players emerge as winners," broker ODDO BHF said in a note. "Of the two, FCA might be a bit more of a winner in the short term given the structure of the deal and the numerous payouts to shareholders to come in the quarters ahead (potentially close to 5 billion euros versus the current capitalization of around 16 billion euros)." The special dividend for FCA shareholders had proved contentious after Italy offered state guarantees for a 6.3 billion euro loan to the company's Italian business. "These announcements should, at last, end the debate over the financial terms of the merger, which had become a big topic and was still penalizing the two groups' share performances," ODDO BHF said. PSA and FCA said they would consider paying out 500 million euros to shareholders in each firm before closing or else a 1 billion euro payout to Stellantis shareholders afterwards, depending on market conditions and company performance and outlook.

The Plymouth Prowler was so cool you could get a Prowler-shaped trailer for it

Like many car enthusiasts, we at Autoblog have a tendency to spend our free time browsing online car listings for unusual vehicles. One of our editors' latest finds is this 1997 Plymouth Prowler with less than 300 miles on the clock. And as we looked at it and discussed it in our work chat room, we were reminded just how cool the Prowler was. It was one of the rare automobiles to go from concept to reality almost unchanged. It was even more remarkable Chrysler pulled it off considering its open wheels, aluminum chassis and dramatic body work. The 1997 model year was the very first for the Prowler, and it was only offered in the metallic purple that the show car wore. That show car made its debut in Detroit in 1993. You can see it in the photo above. Besides some tweaked bumpers and reworked headlights, they're hard to tell apart. The Prowler, inspired by hot rods like custom 1932 Fords, helped kick off the retro craze of the late 1990s and early 2000s, leading to Chrysler's own PT Cruiser and other vehicles such as the VW New Beetle, BMW-built Mini Cooper and Ford Thunderbird. The production car boasted some impressive technology, but it also had a number of drawbacks. It featured an aluminum chassis, and it had a rear-mounted transmission connected to the engine via a torque tube similar to the contemporary C5 Corvette. On the flip side, this hot rod-inspired roadster ended up with a 3.5-liter V6 making 214 horsepower, rather than a rumbly V8. This was because there wasn't room in the narrow nose for a V8. It was also saddled with a four-speed automatic, the only available transmission. The interior, while having cool hot rod touches like the body-color instrument panel, AutoMeter tachometer on the steering column and stylish hoops on the seats, was plasticky and sourced heavily from the Chrysler parts bin. These were issues on a car that cost the equivalent of nearly $60,000 in today's money. Chrysler did make efforts to improve the Prowler over time. The most significant improvement was the introduction of a high-output V6 for 1999 making 253 horsepower, which actually resulted in acceleration appropriate for a performance car at the time. Then again, it still had that four-speed automatic. Plymouth also offered the car in a variety of colors and some special editions with two-tone paint. The one sad thing about the Prowler is that Chrysler recognized some of the shortcomings of the car, and it even built a show car that fixed the issues.