UAW would get 55 pct stake in Chrysler under deal

* Union to also get cash for health fund
* Fiat to get 35 percent of Chrysler
* U.S. taxpayers, creditors to share 10 percent
* Fiat to invest $8 billion, create 4,000 UAW jobs

By Nick Carey and David Bailey
DETROIT, April 28 (Reuters) - The United Auto Workers union
would own 55 percent of automaker Chrysler under a proposed
contract union members must vote upon by Wednesday night,
according to a summary of the deal prepared by the UAW.
If ratified by Chrysler's 26,800 UAW-represented workers,
the company would also make payments to a union-aligned retiree
health care trust in return for concessions by workers.
The summary, distributed to union hourly workers, also says
Italian automaker Fiat SpA -- which is in talks with
Chrysler on forming an alliance -- would "eventually own" 35
percent of Chrysler's stock.
Fiat would also share key engine technology with Chrysler
that would be equivalent to an investment of more than $8
billion and would create 4,000 UAW-represented jobs.
Chrysler -- 80 percent controlled by private-equity firm
Cerberus Capital Management LP [CBS.UL] -- is just two days
away from a government-imposed April 30 deadline for slashing
its debt and labor costs and consummating an alliance with Fiat
in order to receive additional emergency federal loans.
Without those loans, the automaker faces potential
liquidation.
"While we realize the proposed sacrifices for UAW members
are painful, we fought to maintain our wages, our healthcare
and our jobs," UAW President Ron Gettelfinger and Vice
President General Holifield said in a letter to union members.
"In the face of adversity, we secured new product
guarantees and we negotiated new opportunities for UAW
involvement in future business decisions," they added.
Under the tentative agreement, Chrysler would issue a
$4.587 billion note to the retiree health care trust.
The concessions the union has agreed to include new limits
on overtime pay and the suspension of the
cost-of-living-allowance.
Workers will also lose of Easter Monday holiday in 2010 and
2011, their performance bonuses in 2009 and 2010, and their
Christmas bonuses in 2009 and 2010.
The 8,000-strong Canadian Auto Workers union ratified a
deal with Chrysler last the weekend that should save the
automaker C$240 million ($197 million) annually.
The U.S. auto industry is suffering through its worst sales
in decades as American consumers have been battered by the
recession and the credit crunch.
General Motors Corp has a June 1 deadline by which
it must cut labor and debt costs, plus prove its viability as
an ongoing concern, to receive fresh federal aid.
Ford Motor Co has said it can weather the downturn on
its own without government aid.
(Reporting by Nick Carey and David Bailey; editing by John
Wallace)
((email: nick.carey@thomsonreuters.com; +1-312-408-8756))
Keywords: CHRYSLER/UAW

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