Chrysler CEO says Fiat talks progressing
April 30, 2009 by Matt Brogan
Chrysler CEO Bob Nardelli has said he believes talks with Fiat are making progress as the two car manufacturers continue with efforts to complete a proposed alliance that will see Chrysler qualify for additional government loans.
The US Treasury Department has reached an agreement with Chrysler’s largest creditors to cancel US$6.9 billion of debt in exchange for US$2 billion in cash.
“If approved, it would clear a significant hurdle on our continuing journey toward long-term success, but the proposed agreement still needs to be approved by all of the secured lenders,” Mr Nardelli said.
He continued by saying that the leadership shown by the United Auto Workers union unanimously approved a tentative new labour agreement with the carmaker and has sent the deal to local union members for a ratification vote.
CarAdvice will bring you more developments on this situation as they come to hand.
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I read an interesting point on another site. With the current Chrysler-Fiat-US Government plan, the UAW will own 55% of Chrysler. So the UAW, as the representatives of the automotive workers, is also the majority owner of the company. On one hand it should be fighting for workers rights and pay, on the other it is trying to maximise profits and growth. I’m sorry but they are complete opposite goals, yes at first glance it appears good because the union has a vested interest in the companies success, but it also means it can’t truly represent workers interests because it has a second, opposing motive.
It also poses a problem for GM and Ford, mainly Ford, where the UAW who represent workers for both companies has a vested interest in the success of Chrysler, which will to some degree come at the expense of Ford and GM. This could well give Ford justification to demand that the UAW split into Chrysler UAW, GM UAW and Ford UAW. Now if the UAW had a history of being fair, level headed and reasonable, I could see it working. But they never have been, ever.
My bet will be that Chrysler will be back to being bankrupt within a few years due to management paralysis within the UAW led board of directors.
UAW should be glad anyone wants to invest in the rubbish they were building for how many decades.
Seems to me UAW likes scorched earth.
Pointing the blame directly at the UAW misses the point.
Workers can only build what management and the board make they decide the company should build. I’m not saying that both sides are innocent either.
UAW workers actually earn marginally less than the non-union workers in the foreign transplant factories (ie Toyota & Honda) IF YOU DO RESEARCH. The supposed $75/hr takes into account all of the retirees and their health plans. It is the legacy costs that is killing them along with very bad planning.
Having an attractive 401k (retirement plan) and healthcare was a way to attract staff to these companies over decades. Effectively it’s the same for us deferring 9% of our income for super to retire on. You now think giving up that money is okay?
Remember that healthcare is not free in the US. No money, no care. If you have a problem in Australia you can rely on medicare and the free public health system.
Lastly, Tom, the problem would be for Ford only. Not for GM & Ford if Chrysler do a deal. GM have put an offer where the UAW will get 50% of the company and the US Govt will get 40% for their share. FORD ARE NOT TAKING ANY MONEY. THEY ARE SELF SUFFICIENT.
I wasn’t sure how much of GM the UAW would get, if they get 50% of GM then indeed only Ford will be stuck between a rock and a hard place. If UAW need more money, all they need to do is strike at Ford only, bring Ford to its knee’s and give all that business to Chrysler and GM. Surely Ford can use this as reason to renegotiate their union contract and call for a split in the UAW to a FAW or something like that.
I am aware Ford hasn’t taken money, my point is because they are the only US car manufacturer where the UAW doesn’t partially own, then they are at the mercy of a union that has conflicting agenda’s.
Interesting that the CEO of Chrysler; Bob Nardelli says that talks with Fiat are “Progressing” implying that there is still a chance of them surviving
Because the CEO at Fiat; Segio Marchionne has said if he was a betting man he would put his money on Chrysler going into {chaprter 11] banruptcy
Mind you it’s that kind of narrow minded insular small town kind of thinking and the arrogant/ignorant attitude that got Chrysler into trouble in the first place
Chrysler CEO Bob Nardelli. Soon to be the ex CEO of Chrysler.
If the UAW union own and manage Chrysler/GM and in order to make the companies competitive, I am wondering if they would ask their workers to take a pay cut?