UAW Leaders Recommend Approval of Chrysler Deal

Factory-level leaders of the United Auto Workers union voted unanimously Monday night to recommend approval of concessions that could give a union-run trust 55 percent ownership of a restructured Chrysler.

CNBC.com

Union President Ron Gettelfinger said the deal will help keep the automaker out of bankruptcy.

A summary of the revised Chrysler-UAW contract says that Italian automaker Fiat Group eventually will own 35 percent of a restructured Chrysler, with the remaining 10 percent stake divided between the U.S. government and secured lenders, mostly banks and hedge funds.

The Obama administration required that equity fund at least 50 percent of Chrysler's $10.6 billion obligation to a union-run trust that will take over retiree health care costs starting next year, according to the summary.

It also said that under the agreement, workers will no longer get most of their pay if they are laid off. Instead, they will get supplemental pay from the company equal to 50 percent of their gross base pay.

Union leaders say ratification votes across the nation should be finished by Wednesday. That's one day before Chrysler's government-imposed deadline to restructure or the government will end all aid to the struggling company.

Chrysler is living on $4 billion in U.S. government loans and must win concessions from its unions, swap equity for debt and ink a partnership deal with Fiat.

Without the deals, Chrysler almost certainly will be auctioned off in pieces.

Fiat has been in discussions with Chrysler to take a 20 percent stake in the Michigan automaker in exchange for Fiat's small-car technology. Fiat could end up building cars in Chrysler's U.S. factories.

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