Chrysler Reaches Some Sort of Tentative Agreement With UAW
“The UAW said it reached a deal with Fiat and the U.S. government.” Oops! I forgot the word “also”. I wonder how that happened. Because everyone knows Chrysler’s management is large and in charge, despite the fact that its existence depends entirely on the largesse of the American taxpayer and the success of a cockamamie scheme hatched by a struggling Italian automaker and an unelected quango known as The Presidential Task Force on Automobiles. The Detroit News provides the details of the agreement, which show that the UAW—wait . . . No they don’t. Motown’s hometown paper doesn’t provide any details of the union – Chrysler – Fiat – PTFOA agreement. All we get is this: “The settlement agreement, subject to ratification by UAW members at Chrysler, includes a revision of the 2007 health care deal, and members must approve the deal by Wednesday.” At best, we can assume some sort of health care obligation for equity swap involved. At worst, Uncle Sam will guarantee the union’s health care provisions, regardless of Chrysler’s ultimate fate (i.e., liquidation.) As the DetN recognizes, whatever the fine print, the union deal paves the way for American Leyland.
One big issue for Chrysler is that it won’t produce any vehicles with Fiat technology until 2011. With the automaker burning through as much as $1billion a month after losing $8 billion in 2008, it’s unclear how it can survive on just $6 billion more in taxpayer loans . . .
Chrysler would need debtor in possession financing—funds to operate while it’s in bankruptcy—from the government or get government backing for such financing. It has pegged the figure at $24 billion over two years.
And the rest.
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And so the UAW achieves their payoff. I am sure several million will be flowing back to Obama.
And the Game of Chicken continues. This time, the UAW makes a "deal" and Fiat says, "Yes, it looks good to us because we don't pay any money." So the UAW fakes a flinch, and they end up looking like "The Good Guys." Yet, we don't know what they did. Brilliant play. If it goes to UAW vote, then the secret will get out and we'll know what the "concessions" are. I seriously doubt they're much, but I'm certain that Fiat's pockets aren't any emptier, either now or in the future. Same with Cerberus. I hate to say this, but this is way more entertaining than anything on TV, pay-per-view, etc.