DETROIT (Reuters) - A United Auto Workers-aligned healthcare trust would work quickly to sell shares it would receive in a new Chrysler as soon as it in a position to do so, union President Ron Gettelfinger told reporters on Monday.
The UAW healthcare trust would receive a 55 percent stake in a new Chrysler, but no voting role on the board, under a sale plan the automaker filed with the U.S. Bankruptcy Court late Sunday that would speed the bankrupt automaker’s alliance with Italy’s Fiat SpA FIA.MI.
Fiat would hold a 20 percent stake in the new Chrysler, but control the automaker, which also would be 8 percent held by the U.S. government and 2 percent by the Canadian government. Fiat Chief Executive Sergio Marchionne is expected to take a central role on overseeing the new Chrysler.
Gettelfinger said the healthcare trust, a Voluntary Employee Beneficiary Association, would be very stressed initially through its acceptance of Chrysler equity for part of the funding of the trust.
“As you can see as soon as the VEBA’s in a position to where we can sell stock, we will be required to sell stock in order to keep the benefits going,” Gettelfinger said in his first press conference since Chrysler filed for bankruptcy protection on Thursday in Manhattan.
“Now the first couple of years, it’s going to be tight,” Gettelfinger said, adding that the healthcare trustees would have the authority to make cuts in retiree benefits if necessary to keep the trust viable.
Chrysler has been about 80 percent controlled by Cerberus Capital Management CBS.UL since August 2007 when the private equity firm acquired the stake from Daimler AG (DAIGn.DE). Daimler retained the remaining stake in Chrysler.
Reporting by Soyoung Kim and Michael Strong, writing by David Bailey