UAW picks Fiat Chrysler as target company in labor talks

DETROIT (Reuters) - Fiat Chrysler Automobiles is the target company in labor negotiations between the United Auto Workers union and the three Detroit automakers, the UAW said on Sunday.

Contracts for all three of the Detroit automakers, including Ford Motor Co and General Motors Co expire late Monday night.

'All three companies are working hard toward a collective bargaining agreement. At this time, the UAW has selected FCA US LLC (the U.S. unit of Fiat Chrysler) to be the lead bargaining company,” Dennis Williams, president of the UAW, said in an emailed statement.

FCA officials had no comment other than to confirm the company is the lead in ongoing talks.

Traditionally, major provisions of the first contract reached are used as a pattern for the other two Detroit automakers.

Speculation among labor experts was that either GM or Ford would be the lead company because they have been more profitable recently and have fewer newly-hired 'second tier” workers who are paid less than veterans, most of whom were hired before 2011.

Williams has said that he gets along well with Fiat Chrysler Chief Executive Sergio Marchionne. Marchionne has long criticized the two-tier pay system.

In July, when labor talks opened, Marchionne said, 'I firmly believe in wealth distribution.”

FCA has hired more workers than Ford or GM since 2011 when the three companies began expanding their U.S. workforces after the 2007-2009 recession, and therefore have more lower-paid workers.

About 45 percent of FCA's hourly U.S. workforce of about 36,000 are second-tier, while Ford's percentage of the lower-paid workers is 28 percent and GM's 20 percent.

Companies and the union have kept a tight lid on details of the talks, but have said that they are discussing a cost-saving health care collective that would pool all 142,000 active UAW members at the Detroit 3 companies into a single plan. Adding UAW retirees to the pool would mean a collective about 1 million strong.

Union leaders have also said they want to secure raises for veteran workers and narrow the pay gap between longer-serving union workers and the newer ones.

Williams has pushed for the health care pool idea, which could cut benefits costs and free money for richer pay increases. Other UAW priorities include securing commitments for jobs at U.S. factories. Company negotiators are expected to press for ways to curtail pension costs and boost productivity, analysts say.

This is the first time since 2009 that all three automakers can legally call strikes. Most U.S. auto plants are near capacity, and the automakers do not want to lose production of highly-profitable large trucks and SUVs. The UAW has in the past extended strike deadlines when it appeared progress was being made to resolve complex issues.

UAW leaders have rallied members by saying 'this is our time” to reap rewards for workers after three rounds of concessionary contracts since 2007. The Detroit 3 are recording robust profits in North America.

Ford, GM and FCA say they must protect against a downturn in a cyclical industry. But the cost of labor is less and less important to a vehicle's overall cost, according to economist Sean McAlinden of the Center for Automotive Research. Labor's share of vehicle price for the Detroit 3 last year was 6.7 percent, from 15 percent in 2008, he said.