Short-term bankruptcy helps Chrysler survive
UAW members ratify settlement agreement
April ended with UAW members at Chrysler LLC ratifying a settlement agreement with the company, Italian automaker Fiat and the U.S. Treasury Department, and President Obama announcing Chrysler would file for “a quick and efficient” Chapter 11 bankruptcy to eliminate its remaining debt.
Eighty-two percent of production workers and 80 percent of skilled-trades workers ratified the agreement in April 29 balloting at UAW Chrysler locals across the United States. Ninety percent of UAW-represented office and clerical workers voted in favor of the agreement, along with 94 percent of engineering workers.
“This has been a challenging time filled with anxiety and uncertainty for our membership, said UAW President Ron Gettelfinger. “Our members have responded by accepting an agreement that is painful for our active and retired workers, but which helps preserve U.S. manufacturing jobs and gives Chrysler a chance to survive.”
The agreement, which became effective May 4, met Treasury requirements for continued loans to Chrysler. It includes modifications to the union’s 2007 collective-bargaining agreement with Chrysler, as well as the agreement establishing a Voluntary Employee Beneficiary Association (VEBA) trust.
The settlement agreement includes commitments from Fiat to manufacture a new small car in one of Chrysler’s U.S. facilities, and to share key technology with Chrysler.
On April 30 Obama announced that Chrysler would seek bankruptcy protection after a small group of investors, including some hedge funds, would not agree to make comparable to sacrifices agreed to by UAW members and other company stakeholders.
Promising a quick and efficient bankruptcy proceeding, Obama said the process will not disrupt the lives of Chrysler workers or affect consumers’ ability to buy a Chrysler vehicle or get it serviced.
Immediately following Obama’s news conference, Gettelfinger announced that the union will seek court approval of the agreements ratified by UAW members.
“The UAW agreements have been ratified by our membership and approved by the United States Treasury, Chrysler and Fiat,” said Gettelfinger. “We believe it is in the best interests of all concerned for the bankruptcy court to give those agreements swift and complete approval.”
“Once again, UAW members stepped up to the plate and acted responsibly,” said UAW Vice President General Holiefield, who directs the union’s Chrysler Department. “This agreement gives Chrysler a chance to rebuild and participate in the eventual recovery of the U.S. vehicle market.”
