Chrysler-UAW talks resume under strike threat

By Jui Chakravorty and Kevin Krolicki

DETROIT (Reuters) - The United Auto Workers and Chrysler rolled through their second day of marathon bargaining talks as the automaker faced a Wednesday deadline for a strike if a new deal on wages and benefits is not reached.

The UAW has warned it will go out on strike at 11 a.m. ET Wednesday if the two sides fail to agree on a new contract for about 49,000 U.S. factory workers.

Analysts said Chrysler, which lost $680 million in 2006, is not in a position to grant the union the job guarantees it seeks as the struggling automaker tries to cut production to reflect lower demand for its products.

"I would not be surprised to see a strike at Chrysler," IRN Inc analyst Erich Merkle said, adding Chrysler could weather a strike for three to four weeks without hurting its sales.

In a move that shows that neither side is being spared the pain, Chrysler also plans to cut about 1,500 more white-collar jobs than initially planned, a person briefed on the plan said on Tuesday.

That would nearly double the nonunion job cuts that Chrysler announced in February as part of a restructuring plan aimed at returning the company to profitability by 2009.

Chrysler declined to comment on the cuts.

The strike deadline, announced in a letter to local UAW officials on Monday, marks the second time the union has threatened a nationwide walkout against a U.S. automaker in less than a month in a bid to reach a labor deal.