Fiat Chrysler, UAW still bargaining as strike threat looms

Fiat Chrysler Automobiles (FCA) logo

DETROIT – The threat of a strike is looming as Fiat Chrysler and the United Auto Workers continue negotiating a new contract.

The union sent FCA a strike notice on Tuesday. Factory workers could walk out as early as 11:59 p.m. EDT Wednesday.

FCA and the UAW were still negotiating Wednesday night, both sides said.

A strike notice doesn’t mean a strike will happen. FCA and the union could reach a new tentative agreement before the deadline, or the union could put talks with FCA on hold and bargain with Ford Motor Co. or General Motors Co. instead.

If workers do strike, the UAW could call off workers only at some key plants or it could order a strike at all of FCA’s 23 U.S. plants. The UAW represents around 40,000 factory workers in the U.S.

FCA workers haven’t gone on strike since 2007, when workers walked off the job for seven hours during contract negotiations. In 2011, they were prohibited from striking under terms of FCA’s government-funded bankruptcy.

Union members overwhelmingly rejected a tentative agreement with the company last week, saying it didn’t go far enough in restoring benefits workers lost in previous contracts. Members want an end to the current two-tier pay structure, more specific guarantees of new vehicles for U.S. factories and a return of cost-of-living pay raises that the union gave up to help the company in bad times. Now that Fiat Chrysler is profitable, members want a bigger slice.

But a strike would be painful for the company, which could retaliate by sending more work to lower-wage countries like Mexico. A week-long strike could cost the company as much as $1.7 billion in revenue and $35 million in net income, according to Sean McAlinden, chief economist for the Michigan-based Center for Automotive Research.

When they kicked off contract talks in July, both UAW President Dennis Williams and FCA CEO Sergio Marchionne said they would consider it a personal failure if they can’t reach an agreement and workers strike.

The union’s four-year contracts with FCA, Ford and GM expired on Sept. 14, but workers have remained on the job under a contract extension.