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Fiat Chrysler, UAW Appear Headed for a Strike Showdown

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NEW YORK (TheStreet) -- The United Auto Workers union on Tuesday notified Fiat Chrysler Automobiles (FCAU) that it will strike the automaker at midnight Wednesday if an agreement isn't reached in contract talks.

A short strike could serve to alleviate worker frustration and facilitate passage of a contract after several years without salary increases and dissatisfaction with the Detroit-based industry's two-tier system of wage scales. But a prolonged walkout would be costly to the automaker in financial terms. A long and bitter walkout also could hurt the UAW's image and its chances of organizing non-union auto plants in the South.

Investors may be favoring what could be a tough stance by the automaker. Fiat Chrysler shares have risen nearly 10% in the past five days, compared to the Dow Jones Industrial Average which is up about 5%.

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Leaders of the United Auto Workers union pledged to communicate more openly and comprehensively with...


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