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Detroit 3 and UAW could create healthcare pool

Healthcare costs continue to multiply in the US with no clear end in sight, but the United Auto Workers and the Big Three are negotiating a way to rapid growth under control. As part of the latest contract talks, the union has an idea to create a healthcare pool across all of its members at Ford, General Motors, and FCA US. If accepted, the company-wide integration would spread out the expenses and create a massive member base for bargaining with insurance companies. Both Ford and GM are at least considering the proposal, according to The Detroit News, and FCA US might be on board, as well. The idea is the work of current UAW president Dennis Williams and is based on the similar pool for the Voluntary Employee Beneficiary Association for retirees. "I've walked through this several ways; I just don't have any other answer," Williams said to The Detroit News. "I do believe this will work. It's worked with the VEBA." Williams was elected UAW president last year and won by an overwhelming margin. He vowed no more concessions to automakers. In addition to healthcare, the two-tier wage system is another major talking point in the contract negotiation because it gives fewer benefits to entry-level workers. Higher wages are also a request. Healthcare costs are a massive expense for automakers and are expected to reach over $2 billion this year, according to The Detroit News. The payments are up nearly 50 percent or more in just the last four years.

Stellantis reports surprising 2020 results, is 'off to a flying start'

MILAN — Low global car inventories and cost cuts should boost Stellantis's profit margins this year, though a shortage of semiconductors and investments in electric vehicles could weigh on results, the newly-formed automaker said on Wednesday. The forecast came as Stellantis, created by the January merger of Peugeot-maker PSA and Fiat Chrysler (FCA), reported better-than-expected results for 2020 that sent its shares up around 3% in morning trading. "Stellantis gets off to a flying start and is fully focused on achieving the full promised synergies (from the merger)," Chief Executive Carlos Tavares said in a statement. Stellantis is the world's fourth largest carmaker, with 14 brands including Fiat, Peugeot, Opel, Jeep, Ram and Maserati. It said 2021 results should be helped by three new high-margin Jeep vehicles in North America and a strong pricing environment there. The U.S. market has driven profits for years at FCA and starts off as the strongest part of Stellantis. The group's guidance assumes no more significant lockdowns caused by the global COVID-19 pandemic, which shuttered auto plants around the world last spring. Stellantis should also get a lift as its starts to implement a plan aimed at delivering over 5 billion euros a year in savings, without closing any plants. Tavares has also pledged not to cut jobs. But a pandemic-related global shortage of semiconductors, used for everything from maximizing engine fuel economy to driver-assistance features, could hurt business. Auto industry executives have said the shortage should ease by the second half of 2021. Stellantis said its "electrification offensive" could also weigh on results this year. Automakers are racing to develop electric vehicles to meet tighter CO2 emissions targets in Europe and this week Volvo joined a growing number of carmakers aiming for a fully-electric line-up by 2030. Stellantis plans to have fully-electric or hybrid versions of all of its vehicles available in Europe by 2025, broadly in line with plans at top rivals such as Volkswagen and Renault-Nissan, although Stellantis has further to go to meet that goal. The carmaker is targeting an adjusted operating profit margin of 5.5%-7.5% this year. That compares with a 5.3% aggregated margin last year: 4.3% at FCA and 7.1% at PSA excluding a controlling stake in parts maker Faurecia, which is set to be spun-off from Stellantis shortly.

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.