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Amid Continued Negotiations, UAW Gives Fiat Chrysler A Strike Notice

Fiat Chrysler Automobiles CEO Sergio Marchionne (left) and United Auto Workers President Dennis Williams talk back in July.

The United Automobile Workers union has issued a strike notice to Fiat Chrysler. In a letter to the company, the union said that any contract extensions would expire at 11:59 p.m. Wednesday.

If the union decides to strike, it would be the first strike targeting a Detroit automaker in eight years.

As The Detroit Free Press reports, however, a notice does not necessarily mean that the union is headed toward a national strike or a strike at all. The newspaper explains:

"There remains the possibility that the sides are making real progress and strike preparations are merely theater to appease UAW members angry at union leaders for the deal last month that fell well short of their expectations.

" 'From the UAW point of view, it would almost be more politically astute to get everyone to go out on strike if it were a way to serve as a safety valve,' [Gary Klotz, a labor law attorney and partner at Butzel Long in Detroit] said.

"A national strike could quickly become costly to the automaker and the union — estimated to be as much as $300 million a day in lost revenue. Fiat Chrysler has been profitable in recent years, but it remains the weakest automaker among the Detroit Three. The UAW's strike fund declined from more than $1 billion a decade ago to just more than $600 million in 2013."

The New York Times reports that the sticking point for workers has been the union's inability to get the company to put a cap on lower-paid workers.

According to the Times:

"More than 40 percent of the company's factory workers are considered entry-level employees and are paid $16 to $19 an hour, compared with $28 for veteran workers.

"The initial agreement included raises for the lower-tier employees of up to $25 an hour over the course of the four-year deal, as well as raises for longtime workers to nearly $30 an hour.

"But the deal did not put a limit on entry-level jobs or offer any possibility that a worker hired at lower pay could move up to top-wage status."

Sixty-five percent of the workers rejected that deal, sending management and union leadership back to the negotiating table.

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