United Auto Workers members are planning to strike at Fiat Chrysler Automobiles NV (FCAU.N) (FCHA.MI) U.S. plants as soon as Wednesday evening, the first work stoppage since 2007, threatening to bring manufacturing to a halt.
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, Indiana, 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.
Kristin Dziczek, labor analyst with the Center for Automotive Research, said the last time the UAW took the company, then known as Chrysler, out on strike it was a “Hollywood strike,” as in “just for show” in 2007. That strike, in the second week of October, lasted six hours.
The strike weapon was not available to the UAW until this year for Fiat Chrysler or General Motors Co (GM.N) as part of the 2009 government-sponsored bankruptcies at those companies.
The UAW must balance the need to make a forceful statement to Fiat Chrysler with concerns it could substantially hurt the company, the weakest of the Big Three, which would be bad for its own members and hopes of growth.
Arthur Schwartz, a labor consultant and former negotiator with GM, said, “This is the union’s play now. It is up to them what happens.”
Schwartz said UAW President Dennis Williams would not want a lengthy strike because of the pain it could inflict on his members and the harm to Fiat Chrysler.
“Chrysler is not in great financial shape, no matter what the UAW members may think. The company is the weakest of the (Detroit Three) so a long strike would hurt them.”
Harley Shaiken, labor professor at the University of California, Berkeley cautioned, “A strike deadline is not a strike.”
“Strikes are very rare now in the entire economy,” said Shaiken.
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 U.S. Fiat Chrysler assembly, transmission and stamping plants and other operations where 40,000 UAW members work.
Gary Spangler, a veteran worker at the Kokomo Transmission Plant in Indiana, said workers there have been told the call to strike on Fiat Chrysler is nationwide, not just the key Kokomo-area transmission plants and a casting plant that feeds them.
“The last time, you blinked and the strike was over. This is going to be different,” he said. “Marchionne plays hardball and that’s fine. We’re ready.”
Sergio Marchionne is the chief executive of Fiat Chrysler Automobiles NV, who publicly sparred with the former UAW president, Bob King, before reaching an agreement in 2011.
This year, after negotiators for both sides reached a tentative agreement later spurned by the union’s rank-and-file, Marchionne hugged Williams in an unusual joint press conference. Normally, UAW contract events before the ratification vote feature “us versus them” tones rather than a united front.
Schwartz said a prolonged strike would hurt the union’s efforts to convince workers to join the UAW in the U.S. South at foreign-owned automakers such as VW, Daimler AG (DAIGn.DE) and Nissan Motor Co (7201.T).
“The majority of the people here are really worried,” said Lynne Hansen, a worker at the Kokomo plant who has a child in college. “A lot of people live paycheck-to-paycheck. We all know this was looming, but it is hard to save for it. No one wants a strike. I voted ‘yes’ but I totally support the strike. We have to remain together on this. Solidarity.”
Labor analyst Dziczek said that in strikes of the past few decades, Detroit Three automakers have not used replacement workers, whom union members call “scabs.”
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.