autoevolution
 

UAW to Own 55 Percent in Chrysler

After late last night UAW local chiefs approved, unanimously, the labor concessions proposed by Chrysler (the cutting of cash payments to a retiree fund), rumors surfaced today that the UAW agreed to these measures in exchange for a 55 percent hold of the equity in the future Chrysler-Fiat deal, according to inside sources quoted by the Wall Street Journal.

The Chrysler saga now stands as follows: Fiat will own 35 percent, the US government and secured lenders will own 10 percent, and the rest should go to...you guessed it, the UAW. Chrysler workers are to vote tomorrow on the proposed agreement.

In addition, the manufacturer will issue a $4.59 billion note to the health-care trust fund that the union will manage for retired workers. Chrysler will have to pay in 2010 and 2011 $300 million in cash to the fund. Through this fund the UAW will hold its stake in Chrysler and will be allowed to appoint a representative to Chrysler's board.

"While we realize the proposed sacrifices for UAW members are painful, we fought to maintain our wages, our health care and our jobs," UAW President Ron Gettelfinger wrote in a letter with the summary, as quoted by WSJ.

This being said, it would seem Chrysler is getting out of the woods. Rhetoric about who and why it will own it from now onwards is useless at this point. But, at least for the time being, the Fiat deal looks to be on track, as the Americans reached a deal with the CAW and Daimler gave up its 19.9 percent stake in favor of Cerberus. The only shadow is casted by a possible failure in negotiations with the bondholders.

As for the feel of the UAW-Chrysler deal, some like it, some don't. Whereas UAW seems to be pleased, some think "this is the eclipse of the UAW. It's going to be a shadow of what it once was," as Gary Chaison, labor relations professor at Clark University told the source.

"This will make it more difficult to do the things that the union is known for: organizing, political action, bargaining and community development," added John Russo of the Center for Working-Class Studies at Youngstown University.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram X (Twitter)
About the author: Daniel Patrascu
Daniel Patrascu profile photo

Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
Full profile

 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories