Fiat Chrysler North American labor chief retires ahead of talks

Reuters News
Posted: Jun 09, 2015 1:48 PM

By Bernie Woodall

DETROIT (Reuters) - Fiat Chrysler Automobiles said its North American labor chief Al Iacobelli has retired less than two months before company negotiations with the United Auto Workers union.

Iacobelli, 55, will be replaced by Glenn Shagena, 52, FCA's former head of human resources in Mexico, effective immediately, the company said on Tuesday.

A spokesman for the UAW, which represents about 35,700 Fiat Chrysler workers in the United States, declined to comment.

Fiat Chrysler is one of three U.S. automakers that will enter what many expect to be difficult contract talks next month with the UAW, due to the issue of a two-tiered pay and benefit structure for UAW-represented workers.

In 2007, the UAW agreed to a lower pay and benefit scale for newly hired auto workers as all three companies were losing money. After the 2011 round of talks, the automakers began hiring a significant number of new workers at the lower tier of pay and benefits.

Entry-level, or second-tier workers are paid $15.78 to $19.28 per hour, less than the $28 to $28.50 for veteran UAW assembly line workers. The latter also have richer benefits.

UAW President Dennis Williams has said the union wants to "bridge the gap" between the two tiers in the upcoming talks.

About 45 percent of FCA's UAW-represented workers are in the second tier, more than the 29 percent of second-tier workers for Ford Motor Co and 20 percent for GM. Ford has a 20 percent cap for second-tier workers, but its numbers are higher because of exemptions allowed.

A recent labor cost study by the Center for Automotive Research showed that FCA's costs for wages and benefits for auto workers were lower, at $48 per hour, than those of GM, at $58 per hour, and Ford, at $55 per hour.

FCA Chief Executive Sergio Marchionne has spoken out against the two-tiered system in the United States and said he wants to peg more worker compensation to company profits.

(Reporting by Bernie Woodall; Editing by Jeffrey Benkoe and Richard Chang)