UAW gives strike notice to Fiat Chrysler Automobiles

The United Auto Workers union is threatening to go on strike against Fiat Chrysler after its membership rejected a tentative contract deal with the company.

In a statement, Fiat Chrysler said Tuesday that it received a strike notice from the union and that it continues to work toward reaching an agreement.

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A letter to Fiat Chrysler that was posted on the UAW website Tuesday says the union is ending its contract with FCA at 11:59 p.m. ET Wednesday. The union said on its website Tuesday night that negotiations are continuing with FCA and updates would be posted later.

Union members overwhelmingly rejected a tentative agreement with the company last week, with members calling for an end to a 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 making healthy profits, members want a bigger slice.

Sixty-five percent of FCA's union workers voted against the four-year deal. UAW President Dennis Williams said after the rejection that he would return to the bargaining table with Fiat Chrysler in an effort to get a deal that would be ratified. The union represents about 40,000 workers mainly at 23 FCA factories in the Midwest.

Kristen Dziczek, director of the labour and manufacturing group at the Center for Automotive Research, an industry think tank, said the contract termination notice sounds to her like the membership's demands weren't received well at Fiat Chrysler's headquarters.

"If they strike, I don't think it will be very long. It puts too much pain on both sides," Dziczek said. The rejected contract, she said, was a middle ground between company and union needs, but the membership found it unacceptable.

"The members, I think, are emboldened," she said. "If you're not going to get back the things you gave up now, when are you going to get the things back? Why not ask for the moon?"

The strike may not hit every Fiat Chrysler factory. The union could pick key plants such as a transmission factory in Kokomo, Indiana, that would cause the rest of the company's factories to shut down in a matter days due to a lack of parts.

Such a move would help preserve the union's strike fund.

Dziczek said the strike notice doesn't necessarily mean a strike will happen. The union also could put Fiat Chrysler bargaining on hold and shift its efforts to either General Motors or Ford.

But she said a strike could cause Fiat Chrysler to eventually shift more of its production to Mexico.

The union's four-year contracts with all three automakers expired on Sept. 14, but workers have remained on the job under a contract extension.

A message was left Tuesday seeking comment from a UAW spokesman.