Chrysler targets concessions from UAW, suppliers
DETROIT (Reuters) - Chrysler Chief Executive Bob Nardelli on Monday said the struggling automaker had begun talks with the United Auto Workers and was working to win concessions from the union, key suppliers and creditors.
Nardelli also said in an email to Chrysler employees that he had meet over the weekend at the automaker's Auburn Hills, Michigan headquarters with Fiat CEO Sergio Marchionne.
The meeting came less than a week after Marchionne agreed to swap access to Fiat's small-car platforms and development expertise for a 35-percent stake in Chrysler.
"This was a very positive meeting," Nardelli said. "This potential alliance would give us access to substantially all Fiat group vehicle platforms, which would complement our current product lineup with fuel-efficient, environmentally friendly small cars and powertrain technology."
Chrysler, which is owned by Cerberus Capital Management, has been given $4 billion in emergency loans from the U.S. government and has asked for another $3 billion in order to ride out a steep decline in U.S. auto sales.
As a condition for its federal bailout, Chrysler and its larger rival General Motors Corp GM.N have until February 17 to detail a turnaround plan intended to make them viable through cost-saving deals with the UAW and creditors.
"Progress is being made in our discussions with every constituent group, and we're especially pleased with the cooperative and productive discussions taking place," Nardelli said in his email to employees.
Although GM has been active in briefing financial analysts on its progress in preparing a restructuring plan in recent days, privately Chrysler had kept a lower profile.
Nardelli said Chrysler representatives had begun talks with the UAW and praised union leadership for giving up a contract provision known as the "jobs bank" that had guaranteed wages for auto workers even after their jobs had been eliminated.
TURNING UAW INTO A SHAREHOLDER
Chrysler, Nardelli said, is seeking to contribute stock in a restructured company to a UAW-affiliated health care fund instead of cash, a concession GM also is seeking.
UAW President Ron Gettelfinger has spoken against those terms, which would shift more risk and potentially higher costs to blue-collar retirees.
Nardelli also said Chrysler's remaining white-collar workers would share in the sacrifice. Salary merit increases and matching payments into 401(k) retirement funds have been suspended, he said.
Nardelli also said "key executives" had signed waivers prohibiting them from being paid bonuses or severance payments known as "golden parachutes."
The issue is a sensitive one for Nardelli, who was named to the Chrysler top job by Cerberus immediately after it bought an 80.1-percent stake in the automaker from Germany's Daimler AG (DAIGn.DE) in 2007. The choice was notable in part because of the controversy surrounding Nardelli's $210 million severance package from his prior post as the head of Home Depot. Continued...
