Chrysler Canada Reaches Union Deal, Chrysler US Gets Closer

by Jordan Yerman | April 27, 2009 at 08:37 am

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Chrysler is close to hammering out a new deal with UAW ahead of Thursday's deadline, even as Fiat gets closer to approving its own deal, which would give it a 20% stake in the struggling automotive giant. Should Chrysler fail to sew up its deals, it would lose access to additional US federal bailout money and be forced into bankruptcy protection.

Meanwhile, Chrysler Canada and CAW (Canadian Auto Workers) have agreed to a separate deal which would keep factories open north of the border. Chrysler Canada will save over $240 million per year by cutting benefits and compensation to its Canadian employees, as well as axing tuition rebates and new-car purchase plans, though base wages remain intact.

Chrysler has been living on $4 billion in government loans and may get another $500 million to keep it alive through Thursday's deadline to restructure to the government's satisfaction. If it can't close the final deals, however, no more government money will be made available and the company almost certainly would be auctioned off in pieces under bankruptcy court supervision.

Meanwhile, the Canadian Auto Workers Union or CAW members have ratified the new restructuring deal reached with Chrysler Canada on Friday, with 87% of the members voting in favor of the deal.

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