Fiat Chrysler Faces Possible Strike

Published October 7, 2015


Fiat Chrysler Faces Possible Strike

The United Auto Workers union (UAW) informed Fiat Chrysler on Tuesday that they will go on strike.

"In accordance with the parties' September 30, 2015 Extension Agreement, this letter shall serve as formal notice provided by the International Union, UAW and its respective Local Unions, which are signatories to one or more National and Local Collective Bargaining Agreements with FCA US LLC, of the Union's termination of the aforementioned agreements, to be effective at 11:59 p.m. on Wednesday, October 7, 2015," the letter said. It is not clear which Fiat Chrysler factories the UAW’s strike will affect.

Fiat has confirmed they received the notice and has said, "The Company continues to work with the UAW in a constructive manner to reach a new agreement." The automaker and the union have been talking in order to reach an agreement but it is unclear if any progress has been made. The UAW rejected a four year contract deal with Fiat Chrysler and sent the notice of a strike five days later. In this proposal the pay gap between first and second tier was narrowed, but not closed. First tier workers making about $28 an hour while second tier workers cap out at $19 an hour. Fiat Chrysler’s labor force is 45% second tier workers- the highest amount among big name auto makers. This enables them to also have the lowest labor cost. UAW members would like to see the two-tier wage scale abolished. The new deal also did not include and future product or investment plans for the U.S. based factories causing concern about job security for some.

A UAW source said strategic strikes could be used to increase bargaining pressure on FCA to better the terms of the rejected contract. While a general strike could potentially shut down all 40,000 hourly workers at FCA, a strategic action could save UAW expenses from its strike fund. A strike only at Kokomo would shut down about 75 percent of profitable Jeep and Ram pickup production, said Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research in Ann Arbor, Mich. FCA workers not on strike but idled by a shutdown at a key component plant such as Kokomo would be eligible for unemployment insurance, rather than the $200 per week from the union's strike fund.
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