Updated from 1:17 p.m. EDT

With a labor strike at Chrysler, one of the last bastions of workers' solidarity in the U.S. is squaring off with capitalism's elite -- the private-equity industry.

The United Auto Workers launched a strike at Chrysler -- now a private company owned by buyout firm Cerberus Capital Management -- after Wednesday's 11 a.m. EDT deadline in the labor contract talks passed without an agreement.

A source familiar with the negotiations says the talks have been called off, and it's not known when they'll resume.

Five Chrysler factories in the U.S. were already down due to inventory gluts at the company, but the union is specifically targeting Chrysler's other 19 plants, the source says.

A UAW spokesman could not be reached. A Chrysler spokesman declined to comment.

This strike follows a two-day work stoppage late last month at Chrysler's Detroit counterpart, General Motors ( GM), which ended with a historic agreement on a new labor contract. Wall Street viewed that strike as a symbolic measure by the union designed to convince its members that it was taking a tough stand even while it made some concessions to aid the company's prospects for long-term survival.

This time around, the union is facing a new owner at Chrysler that does not answer to public shareholders and has access to large amounts of capital. After Cerberus initially took pains to assure the UAW that it will support its membership, a labor strike promises to test the firm's willingness to work with the union.

Cerberus acquired a majority stake in Chrysler from the automaker's former German parent, Daimler ( DAI), in hopes of restructuring the flailing company and selling it for a big gain. The firm took Chrysler private and hired Bob Nardelli, the former CEO of Home Depot ( HD), to manage the company.

While a strike at Chrysler has no direct consequences for the stock market, its negotiations with the UAW could have implications for the No. 2 U.S. automaker, Ford ( F), which is next in line to hammer out a new contract with the union.

In the GM contract, the two parties agreed to set up a union-controlled health care trust fund, or VEBA. It also established a two-tier wage structure, allowing the company to pay new hires at a lower rate that is more comparable to its foreign-based competitors.

The VEBA will be expensive for GM in the near term as the it shells out cash to finance the fund, but in the long run, it promises to free the company from the crushing burden of its health care payments to retirees. That will lower GM's borrowing costs and boost the profitability of its auto operations, allowing the company more leeway to invest in new products and become a more formidable competitor.

Talks at Chrysler are centered on how much the automaker would pay to finance a VEBA. It has an estimated $18 billion in unfunded retiree health care costs. The automaker also is trying to get health care concessions from the UAW that were already granted to GM and Ford.

The UAW is seeking production guarantees at U.S. plants to preserve union jobs.

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