May 4, 2009

Chrysler bankruptcy process

• The UAW ratified agreements, on April 29, 2009, that contained adjustments to the contract and modifications to retiree health care. The agreement adjustments and modifications were negotiated with the United States Treasury and Chrysler/ Fiat.
• The overall agreement with Treasury includes many components -- the Fiat alliance, the new government loans, continuation of the pension plans, the labor agreement modifications and the new retiree medical agreements. The UAW is a full partner in this process and is supporting all these agreements.
• In order to obtain quick court approval of these agreements, the Treasury Department urged Chrysler to file for bankruptcy on April 30, 2009.
• The agreements regarding the retiree health program were submitted to the bankruptcy court on Sunday, May 3, 2009, along with the agreements on all the other components.
• The UAW, Treasury, Chrysler, Fiat, and Chrysler’s largest banks are all supporting quick approval of these agreements. The UAW has hired bankruptcy experts from two New York law firms who are working with our in-house lawyers to represent the UAW and our retirees in the bankruptcy proceedings.
• On Monday, May 4, 2009, the Bankruptcy Court will be asked to allow the approval process to move forward very quickly. If that process is approved, a mailing will be sent to all UAW Chrysler retirees later in the week. That letter will include a notice from the court and a letter from UAW President Ron Gettelfinger and UAW Vice President General Holifield along with Class Counsel from the 2007 court approval process, Bill Payne, describing the agreements and UAW support for the agreement.
• That letter will describe the proposed retiree medical agreements, which are fully consistent with the agreements ratified last week.
• A hearing on final court approval will likely be scheduled for later in May. Retirees have the right to submit objections to the proposed agreements if they wish. The process for objections and for obtaining full legal documentation of the proposed agreements will be described in the notice that retirees will receive in the mail.
• Retirees do not need to take any action now. The UAW supports court approval of these agreements. We are not asking retirees to file objections. If the Bankruptcy Court approves the agreement later this month, retirees will receive more detailed information about the new benefit program in the coming weeks.
• While this process is developing in the Bankruptcy Court over the next few weeks, there will be no changes to medical benefits or pension benefits.
• Under the agreements, there will be no change in the pension plan and those benefits will continue.