September 22, 2016 / 7:12 PM / in 2 years

UPDATE 2-Canada's auto union names Fiat Chrysler as next target for talks

(Adds comment from union leader, context from second analyst)

By Allison Lampert

MONTREAL, Sept 22 (Reuters) - Canada’s main autoworkers union, Unifor, said on Thursday that Fiat Chrysler Automobiles was its next target in negotiations, after securing a tentative deal with General Motors Co this week.

The Canadian union uses pattern bargaining, in which the first deal it reaches with one of the three big unionized automakers sets a template the other two are expected to follow.

After securing increased investment in Canadian plants from GM, Unifor will ask Fiat Chrysler to upgrade an outdated paint shop at a Brampton, Ontario plant which makes the Chrysler 300 and Dodge Challenger and Charger sedans. Unifor said it represents 9,750 Fiat Chrysler manufacturing workers in Canada.

Unifor president Jerry Dias has turned bargaining with GM, Fiat Chrysler and Ford Motor Co into a campaign for the future of Canada’s once-thriving auto industry. The union made concessions to GM on pensions in exchange for new investments.

FCA said in a statement it has “a long-standing history of working collaboratively with Unifor.”

Nearly 4,000 Unifor GM members are scheduled to vote Sunday on a deal that Dias says would guarantee the survival of the automaker’s Oshawa facility and bring some engine assembly from Mexico to a second plant.

If members approve the four-year contract, Unifor said it would resume Fiat Chrysler talks.

Fiat Chrysler would benefit from the union’s GM deal where Unifor agreed to a pure defined-contribution pension plan for new workers. Veteran employees have defined-benefit pensions and those hired since 2012 have a hybrid plan.

Talks are expected to be easier with Fiat Chrysler than with GM, where a deal was reached with Unifor just minutes before a Sept. 19 strike deadline, industry analysts say.

Fiat Chrysler said it has invested C$3.7 billion and created 1,200 jobs in Canada since 2014 to develop and produce its Pacifica hybrid minivan.

“GM was the toughest,” said Arthur Schwartz, a former GM negotiator. “Chrysler would not take a strike in Canada because of the minivans.”

Dias said by phone he is “very concerned about Brampton.”

But upgrading the aging paintshop would cost “hundreds of millions of dollars,” said a source familiar with the facility.

And Fiat Chrysler, the weakest of the three automakers, won’t be eager to invest in Brampton after pouring money into the Windsor plant which builds the Pacifica, said Sam Fiorani, vice president of AutoForecast Solutions LLC.

“Fiat Chrysler is not anxious to put money into anything.” (Reporting by Allison Lampert in Montreal; Additional reporting by Susan Taylor in Toronto; Editing by Nick Zieminski and James Dalgleish)

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