Chrysler, UAW make a deal
Chrysler Corporation reached an agreement with the United Automobile Workers (UAW) and Italian automaker Fiat that reportedly meets Treasury department requirements for additional funding to keep the automaker operating. Neither the automaker nor the UAW released details of the agreement, which comes just days before an April 30 deadline imposed by the Obama administration.
Chrysler is still expected to seek Chapter 11 bankruptcy protection, as some media outlets have reported, but there are indications now that the company should still be able to stay in business. Speculation earlier in the year was that a bankruptcy filing would result in a liquidation of the company.
The latest deal reportedly includes further concessions from the UAW, which is expected to bring it to a membership vote by Wednesday. Chrysler had already reached an agreement with the Canadian Auto Workers, which Fiat had said was essential to their forming an alliance with Chrysler. That agreement was ratified Sunday.
We think it’s a positive development, given that Chrysler’s future is hinged upon linking with another manufacturer. If the Fiat deal was to fail because of the UAW demands, it would be to Chrysler’s detriment.
Read “Government preparing for Chrysler bankruptcy” and “More troubles for Chrysler.”
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Posted by: Cynical Synapse | Apr 28, 2009 9:07:00 PM
While Wall Street seems to get whatever it wants, the auto industry is left to fend for itself. These days, it seems whatever concessions the UAW and/or automakers are willing to make is the bare minimum.
Despite concerted efforts by both GM and Chrysler, it's been a struggle to get government and the markets to accept their endeavors. Add swine flu to the mix, and we don't really know why the markets reacted as they did.