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Widespread union strike threatens automotive industry in US

Fiat Chrysler Automobiles faces major strike by thousands of union workers.

Thousands of US car industry workers have threatened strikes against the car-making giant Fiat Chrysler Automobiles, demanding fair contracts.

The announcement came on Tuesday, when workers, under the United Auto Workers union (UAW), urged the company to guarantee their job security and eliminate provisions that they deem unfair, or else they will go on a strike on Wednesday night.

UAW officials reached a tentative deal for another four-year period with the car maker on September 15. However, thousands of employees rejected the agreement by a nearly two to one margin.

Despite pay raises and bigger bonus checks, the new contract contains provisions maintaining a two-tier wage system, under which workers hired after 2007 will get paid significantly lower and enjoy fewer benefits than their senior colleagues.

The newer employees, making up for about 45 percent of the workers, earn between $17 to $24 per hour, while veteran autoworkers make an average of $28 an hour.

In a statement, Fiat Chrysler managers said that the pay scheme will be removed eventually, but the company cannot afford to eliminate it at a faster rate. They added that the new contract enables the company to remain competitive.

According to Jodi Tinsen, a spokeswoman for the car maker, the two sides have been negotiating over the weekend to avoid a strike.

 

Based on its most recent quarterly results, a strike that shut down all of the company’s North American production facilities is estimated to cost the business more than $300 million a day in lost revenue, and about $18 million a day in operating profit.

Similar contracts by General Motors (GM) and Ford (F) limit the second tier to 25 percent of their workforce, giving them the chance to make it to the top tier in case of new hires.

For instance, Ford hired so many workers earlier this year that it surpassed the cap, and moved about 800 workers from the second tier up to the first tier.

If enacted, this will be the biggest strike that hits the US car industry since 2007.


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