UAW President Ron Gettelfinger, left, and Vice President General Holiefield speak in Sterling Heights on Monday after a meeting. (Brandy Baker / The Detroit News)
Local United Auto Workers leaders representing 25,000 Chrysler LLC workers unanimously approved concessions Monday night that could give a union-run trust 55 percent ownership of a restructured Chrysler.
A summary handed out to UAW local leaders says Fiat SpA will "eventually" own 35 percent of Chrysler. Once the automaker is re-organized, the U.S. government and Chrysler's secured lenders, mostly banks and hedge funds, together will end up owning 10 percent of the company, according to the 12-page summary.
Chrysler intends to pay a $4.58 billion note into the trust fund, or VEBA, that the union will manage to provide health care for retired workers. The agreement says Chrysler will pay $300 million in cash into the VEBA in 2010 and 2011, and increasing amounts up to $823 million from 2019-2023.
UAW President Ron Gettelfinger praised the deal and UAW leaders, and now the changes to the 2007 national labor pact must be approved by a simple majority of rank-and-file members.
The ratification vote must be completed by 10 p.m. Wednesday.
"This is the most difficult situation in the history of our union," Gettelfinger said.
He stopped short of saying whether Chrysler or General Motors Corp. can avoid bankruptcy.
"Those balls are not in our court," he said, adding that the UAW lived up to its part of the government demands.
Chrysler is living on $4 billion in U.S. government loans and must win concessions from its unions, swap equity for debt and ink a partnership deal with Fiat.
The deal protects the current wages of workers but suspends performance and Christmas bonuses. It also suspends cost-of-living allowances, cuts break time from 46 minutes to 40 minutes per eight-hour shift and gets rid of the controversial jobs bank.
Italian automaker Fiat has committed to manufacturing a small car in one of Chrysler's U.S. facilities, according to the summary.
In addition, Fiat will share "key technology" with Chrysler and all its product platforms.
"This is equivalent to an investment by Fiat amounting to more than $8 billion and will create approximately 4,000 new UAW jobs," the summary said.
Local UAW leaders said they would share details of the changed labor pact with their members as soon as Monday night, and several locals' officials said they intended to hold elections at their locals on Wednesday.