UAW issues strike notice to FCA
Thousands of United Auto Workers members could walk out of Fiat Chrysler Automobiles NV plants and head to picket lines early Thursday if bargainers fail to reach a new tentative labor contract.
The union turned up the heat on the automaker Tuesday by threatening to strike if a deal cannot be reached by 11:59 p.m. Wednesday. A notice sent by UAW Vice President Norwood Jewell formally cancels a previous contract extension with the automaker and issued the deadline.
The union and company appeared to continue to negotiate Wednesday morning. The UAW also posted some “strike facts” on its Facebook page, telling members that in case a strike is called, who would be eligible to receive strike benefits, how much pay they would receive and when, and what medical benefits are covered.
A national strike involving all 40,000 members with the automaker is the most drastic option the union could take. It also could call targeted strikes at select Fiat Chrysler plants; keep talking to Fiat Chrysler; or a combination of options that include moving the bargaining focus to General Motors Co. or Ford Motor Co.
The last time Chrysler workers struck was in October 2007, when workers in most U.S. plants walked out briefly after a union-imposed deadline passed. The union and Chrysler announced a tentative agreement about six hours later.
The UAW gave up the right to strike for the 2011 talks as a condition of the government bailouts of Chrysler and GM.
Industry insiders say the strike authorization notice could be a tactic to increase pressure on the automaker for a new deal or could be a way to show members — including many who voiced concern about the union’s perceived close relationship with the company — that leaders are fighting for them. Some analysts say the notice indicates the sides may be far apart on key issues.
Talks between the UAW and Fiat Chrysler resumed late last week after workers rejected the first agreement by a 2-to-1 margin.
Members say they voted down the first deal for various reasons: It failed to eliminate a tier-two wage structure that has divided workers. It did not fully explain a new health care co-op. And it failed to detail $5.3 billion in plant investments that reportedly would move nearly all car production to Mexico in exchange for more profitable pickups and SUVs built here.
President Dennis Williams said earlier this week the union was “fighting to address your issues” and would return to Fiat Chrysler to bargain.
Fiat Chrysler confirmed Tuesday morning that it received a strike notification from the UAW, but added “the company continues to work with the UAW in a constructive manner to reach a new agreement.” In an update posted on social media just before 7:45 p.m., the union also confirmed the two sides were continuing to negotiate, saying it will update members “when there is more to report.”
A company spokeswoman declined further comment, and a UAW spokesman declined to comment on bargaining.
Local union leaders are calling meetings to update members and posting letters on strike procedures, according to documents obtained by The Detroit News.
“We have complete confidence that a favorable resolution will be reached on our behalf as soon as possible,” reads a letter from UAW leadership with Local 140, which represents Warren Truck Plant. “Every effort will be made to keep the membership informed.”
A letter to UAW Local 7 members in Detroit said if a strike is called, workers are to report to the union hall near the Jefferson North Assembly Plant for further instructions, including picket assignments.
For members to be eligible for strike benefits, members “must participate in a strike activity” and “register and make application for strike benefits.” Both must be done on the days and times assigned to them, according to the document.
Another memo from UAW Local 271 in Trenton, which represents Trenton Engine hourly employees, tells workers not to just walk off factory floors if the deadline hits; it said “local leadership will be in the plant at that hour ‘if’ a general strike is called and will give you direction at that time.”
Workers at the automaker’s Warren Truck Plant had mixed reactions Tuesday afternoon after being handed their strike instruction fliers.
“I figured a strike would happen; I’m prepared,” said Gerald Witman, a 16-year veteran worker. The tier-one worker wasn’t surprised to see the contract voted down and said he had problems with a number of issues, including pay and schedules. “There’s a lot that needs to be talked about.”
Chuck Flynn, another tier-one worker from Chesterfield, was optimistic that a strike could be avoided: “I don’t see a reason why the two sides can’t come to a deal,” he said.
Flynn thinks the first contract wasn’t clear enough on a number of points, including the proposed health care co-op. He voted against the deal.
The likelihood of a local or national strike for the union against Fiat Chrysler significantly increased after 65 percent of members voted to reject a tentative four-year deal and sent negotiators back to the bargaining table.
Many union members have been agitating for a strike, almost since negotiations began. Strikes typically are a last resort, but can be used tactically to satisfy members’ expectations and put pressure on automakers.
A strike could come about in more than one way. The union could call a national strike or target one plant that, if prolonged, would cause a ripple effect on production and cripple operations across a company. Analysts have said a strike at Fiat Chrysler’s Kokomo, Indiana, plants — which build most of the company’s transmissions — would hurt many Fiat Chrysler assembly plants.
But targeting one plant helps the UAW limit strike expenses it would need to pay.
“We’re willing to strike for our pockets,” said Alonzo Carter, an entry-level worker at Jefferson North Assembly. “(Fiat Chrysler CEO Sergio Marchionne’s) going to lose more money than we’re going to lose.”
Carter said “it shouldn’t have come to this” because leaders should have been able to negotiate a better deal and more clearly address topics such as the health care co-op and re-establishing a cost of living adjustment for the workers and retirees.
Kristin Dziczek, director of the Labor and Industry Group for the Center for Automotive Research in Ann Arbor, said the notice from the UAW indicates it is “not getting where they need to be at the table.”
“The strike is the ultimate weapon the union has,” she said.
But a strike would be painful to both sides, she said, adding that Fiat Chrysler couldn’t afford to have product lines down for too long. The union also would be hampered by paying strike benefits for a lengthy walkout; the UAW’s strike fund has about $600 million in it, down from $1 billion in 2006.
“That’s the pressure to bring the parties back (to the table),” Dziczek said.
The notice also could be seen as a sign that the union is considering putting Fiat Chrysler on the back burner, and instead turning bargaining attention to either GM or Ford, said Dziczek and Art Schwartz, president of Ann Arbor-based consultancy firm Labor and Economics Associates and a longtime labor-relations executive at GM.
Those companies have been working under indefinite contract extensions since the union’s contract covering some 140,000 members expired Sept. 14.
Sales of hot-selling Jeep and Ram Truck models would likely be the first to be impacted by a strike. Overall, Fiat Chrysler finished September with a 76-day supply of vehicles (590,503 units) on dealership lots.
The last major strike against a U.S. automaker came 17 years ago when the UAW struck two key GM plants in 1998 — Flint Metal Center and Delphi Flint East. That strike lasted 54 days, costing GM an estimated $2 billion and forcing it to idle nearly 180,000 employees and close 26 of 29 North American assembly plants; the strike also idled about 100 auto supplier plants.
In 2007, a strike against GM stopped production at more than 80 facilities in the U.S., idling more than 70,000 workers for two days. The strike cost GM more than $300 million a day, according to Buckingham Research Group.
Williams previously has said that a strike would be a bargaining failure. The union president told The Detroit News in mid-August that deciding to strike would be a “tough call.”
Staff Writer Michael Martinez contributed.