(Bloomberg) -- Fiat Chrysler Automobiles NV (NYSE:FCAU)has agreed to boost pay for less-senior and temporary U.S. factory employees, a concession to the United Auto Workers union that will be costlier for the company than its Detroit-area peers.
Newer hires that started at lower wages and have been progressing up the pay scale will reach the top hourly rate by the end of 2023, according to people familiar with the tentative agreement the company and union reached Nov. 30. Fiat Chrysler will also open up the pathway for temporary workers to reach full-time status, said the people, who asked not to be identified ahead of a UAW vote on the proposed pact.
The UAW’s national Fiat Chrysler council is meeting in Detroit on Wednesday to decide whether union locals should vote on the new four-year contract. If the council gives its blessing, members will start casting ballots Dec. 6.
About 59% of Fiat Chrysler’s U.S. workforce are “in-progression” and 13% are temps, Chief Executive Officer Mike Manley told analysts during an Oct. 31 earnings call. Because those percentages are much lower at both General Motors Co (NYSE:GM). and Ford Motor (NYSE:F) Co., the pay bumps will have a greater impact on Fiat Chrysler’s labor costs.