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UAW threatens strike at Fiat Chrysler U.S. operations

A strike at its U.S. operations could cost the automaker $40 million a week in operating profit, said Sean McAlinden, chief economist with the Center for Automotive Research.

Workers at several plants in Kokomo and at least one in Michigan received notices to be ready to strike but it was not clear whether all Fiat Chrysler plants would be involved.

On Tuesday, the UAW union warned Fiat Chrysler that workers at its U.S. operations are preparing to strike unless a new contract agreement is reached, the company said.

The UAW notified Fiat Chrysler that the current four-year contract extension would expire at 11:59 p.m. on Wednesday.

The notice did not specify whether the union would call a strike at some or all of the 37 U.S. Fiat Chrysler assembly, transmission and stamping plants and other operations where 40,000 UAW members work.

But some workers were receiving clear indications to strike which could affect a number of key plants.

One worker at the Kokomo Transmission Plant in Indiana said on Tuesday his union steward told workers there to prepare to strike at 11:59 p.m. on Wednesday. The Automotive News reported that strike notices were posted at the Kokomo Castings Plant, also in Kokomo.

The company’s assembly plants would grind to a halt if the castings plant or the transmissions plants in Indiana conduct walkouts.

Since the U.S. auto market rebounded after the Chrysler bankruptcy in 2009, which included a management takeover by Italy’s Fiat, the United States has been the driver of company profit.

Fiat Chrysler said in a statement that it received strike notification from the union and that it “continues to work with the UAW in a constructive manner to reach a new agreement.”

Kristin Dziczek, labor analyst with the Center for Automotive Research, said that in strikes of the past few decades, Detroit Three automakers have not used replacement workers, whom union members call “scabs.”

She said she could not predict whether the company would attempt to use management and replacement workers if Fiat Chrysler UAW members walk off assembly lines.

Dziczek and McAlinden both predicted that if a contract agreement is not reached by late Wednesday night, a localized or U.S.-wide strike of Fiat Chrysler operations would last at least a week or two.

“It’s a game of chicken to see who lasts longer,” said Dziczek.

Last week, 65 percent of Fiat Chrysler unionized workers voting rejected a proposed four-year contract.

The UAW has an extension in place for the existing four-year contracts at Ford Motor Co and General Motors Co. They were extended before their scheduled expiration on Sept. 14.

The UAW has yet to enter focused negotiations with Ford or GM. It chose Fiat Chrysler to reach an agreement with first, which is then used largely as a pattern for the other two Detroit automakers.

Last week’s rejection was the first time since 1976 that UAW rank-and-file voted down a tentative national contract agreed by the union and the company it targeted for the first pact.

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