The United Auto Workers Union (UAW) could end up with a majority stake in Chrysler in the latest deal to save the struggling US car maker.
A draft deal has been announced that involves the UAW taking a 55 per cent in Chrysler, with the rest of the firm split between creditors, the US government and Fiat.
In return for the majority stake, the Union would have to agree to a halving of the $10.6bn (£7.1bn) Chrysler had pledged to invest in healthcare plans for retired workers.
With Fiat set to take up to 35 per cent, that leaves just 10 per cent of the company, likely to be split between the US Government and Chrysler’s creditors.
In a letter to union members, UAW president Ron Gettelfinger wrote: “These modifications to our contract and to the [healthcare] trust are essential to securing federal loans to keep Chrysler in business so that we can keep manufacturing jobs here in the United States and, more importantly, live to fight another day,”
Chrysler has until tomorrow (Thursday) to prove its viability to the US government.
The UAW has also made similar agreements with General Motors, which could involve the UAW getting 40 per cent of GM’s shares.