Detroit, Michigan – Members of the United Auto Workers Union (UAW) working at Chrysler have ratified a settlement agreement with Chrysler, Fiat and the U.S. Treasury. The contract requires the UAW to accept Chrysler equity for half the US$10.6 billion obligation for a retiree health-care trust, giving the UAW 55 per cent ownership in the proposed Chrysler-Fiat partnership.
“This has been a challenging time filled with anxiety and uncertainty for our membership,” said UAW president Ron Gettelfinger. “Our members have responded by accepting an agreement that is painful for our active and retired workers, but which helps preserve U.S. manufacturing jobs and gives Chrysler a chance to survive.”
Chrysler must have a deal with Fiat and concessions from workers and creditors to qualify for loans from the U.S. government. It is asking for as much as $6 billion, on top of $4 billion it has already received.
Among the concessions, Chrysler can hire new workers at a lower rate of pay than existing UAW members; cost-of-living allowances will be suspended; workers will lose their Easter Monday holidays in 2010 and 2011; they will lose their performance and Christmas bonuses in 2009 and 2010; and Fiat will provide engine technology that is expected to create 4,000 new UAW jobs.