'Chrysler Saved By Auto Unions'

Chrysler Saved By Auto Unions

By Auto Bots at 04/27/09 14:31

The US government gave Detroit-based automaker Chrysler up to April 30 to finalize a deal with auto unions or merge with Italian automaker Fiat otherwise they will be force to bankruptcy by government itself.

It seems like Chrysler is saved from force bankruptcy as they finally ratified an agreement with the Canadian Auto Workers union last Sunday after the two landed on a deal during Friday of last week. The deal between Chrysler and CAW promised to save $240 million per year for Chrysler.

Also last Sunday, Chrysler reached a deal with the United Auto Workers union. Although the deal still needs ratification, Chrysler said this means they have better chances to reach a deal with Fiat for a possible partnership and eventually merging of the two automakers.

The ratified agrrement of Chrysler to the Canadian Auto Workers includes eliminating the semi-private hospital coverage of employees, eliminating the one-time $3,500 vacation buyout, eliminating the clawback reimbursement through SUB program, eliminating car purchase by employees, reduction of the maximum fee for prescriptions et al.

This being said, it's likely we will still be seeing Chrysler cars on the road. As for GM, we may never know if they can satisfy the government with their restructuring plans and avoid force brankruptcy until the deadline is reached.

hello,

just want to change title by "Chrysler saved by Sergio Marchionne" isn't it ?

but in the same time Fiat CEO annouced to take some business in Opel car industry...

So, do you think it's possible for one manager even if it was the best one all around the world 2 years ago to do that ???

on a related note, GM is a bit "secretive" on what they are doing to prevent the force bankruptcy from the government. I wonder what will happen when the deadline to satisfy the government with their restructuring is reached. Is it a "yes! we made it!" or a "no!!! we're doom!" moment for GM?

Yes, secretive. They have to be. No matter what happens, the media, government, and public is going to slaughter them. So they are wise not to show their cards till they have to. Bankruptcy allows them to basically 'cheat' to survive, by permitting them to pull some really bad things against the Union, Suppliers, and debt-holders. But once you say the word 'bankruptcy', will public opinion ever forget it? It is a tough spot, and with the size of the company and the huge legacy operating cost, nothing happens easily.

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