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Fiat Chrysler CEO cancels auto show appearance to help with labor talks

Day One Of The Geneva Motor Show 2015Day One Of The Geneva Motor Show 2015
Sergio Marchionne, center, CEO of Fiat Chrysler Automobiles.Photograph by Gianluca Colla — Bloomberg via Getty Images

Chief Executive Sergio Marchionne has cancelled his appearance at the Frankfurt auto show this week after Fiat Chrysler Automobiles (FCA) was picked as the target company in labor talks in the United States, a company spokesman said on Monday.

FCA will get the first shot at setting a pattern for wages and benefits for more than 140,000 unionized factory workers at the Detroit Three automakers, the company and the United Auto Workers union said Sunday.

Marchionne was originally scheduled to meet with the press at the Frankfurt show on Tuesday.

The UAW did not elaborate on its decision to choose FCA to set the pattern for new master contracts it will later negotiate with General Motors (GM) and Ford (F).

FCA Executive Sergio Marchionne has been the most vocal among Detroit CEOs in calling for an end to the current wage system under which recently-hired UAW workers earn about 40 percent less per hour than union veterans on the assembly line.

UAW leaders have called for narrowing or eliminating the pay gap, pointing to the robust profits rolling in from sales of the trucks and sport utility vehicles UAW members build.

If FCA and the UAW cannot come to terms, the union could order strikes, potentially hobbling FCA’s production of its highest-profit U.S. models.

The UAW’s lead negotiator at Chrysler, Norwood Jewell, has said in messages to members that job security and pay increases are his top priorities.

Looming over the UAW’s negotiations with FCA, GM and Ford are the growing number of U.S. auto plant workers who are not members of the union and work for European and Asian automakers in the southern United States.

The more flexible work rules at non-union factories, and in certain cases lower wages and benefits, could put limits on the UAW’s aspirations, analysts said.

Contracts for all three Detroit automakers 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.