Chrysler is working to agree concessions with the United Auto Workers union, key suppliers and creditors, has agreed to axe its controversial ‘jobs bank’ and has hosted Fiat CEO Sergio Marchionne at its US headquarters.
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“This was a very positive meeting,” Chrysler CEO Bob Nardelli said in an email to employees cited by Reuters. “This potential alliance [the deal announced last week to swap 35% of Chrysler equity for access to Fiat technology] would give us access to substantially all Fiat group vehicle platforms, which would complement our current product lineup with fuel-efficient, environmentally friendly small cars and powertrain technology.”
Along with rival General Motors, Chrysler has until 17 February to detail to Congress a turnaround plan intended to make it viable through cost-saving deals with the UAW and creditors as a condition of the federal loan packages recently made available to both.
“Progress is being made in our discussions with every constituent group, and we’re especially pleased with the cooperative and productive discussions taking place,” Nardelli said in his email to employees.
According to Reuters, Nardelli said Chrysler representatives had begun talks with the UAW and praised the union’s leaders for giving up the jobs bank that had guaranteed workers’ wages even after their jobs had been eliminated.
Dow Jones reported the UAW and Chrysler reached a deal late last week to temporarily end the programme, which requires the auto maker to ‘bank’ employees rather than firing them during production cutbacks. Workers then receive more than 85% of their pay based on state unemployment benefits and ‘sub pay’ provided by the company.
Closing the jobs bank was one of the terms Chrysler, General Motors and the union had to agree to in order to continue accessing low-interest loans from the federal government.
Nardelli said Chrysler was seeking to contribute stock in a restructured company to a UAW-affiliated health care fund instead of cash, a concession GM also is seeking, Reuters reported.
But UAW president Ron Gettelfinger has spoken against those terms, which would shift more risk and potentially higher costs to blue-collar retirees, the news agency noted.
Remaining white-collar workers and “key executives” were also making concessions on pensions, bonuses and severance payments.
According to Reuters, Nardelli said Chrysler also was looking to reduce the number of its dealers and would review both dealer payment terms and their profit margins on new vehicles. The automaker wanted price reductions from all of its suppliers and would not accept higher material costs for 2009.
GM spokesman Tony Sapienza told Dow Jones his firm was also in talks with the UAW on suspending the jobs bank programme and Ford, which has not yet accepted federal funds, is also seeking similar concessions from the union.
Ford had about 1,400 workers in the bank in November, receiving anywhere from 80% to 100% of their pay, the news agency said.
