Thursday, April 30, 2009
If it holds up among all parties involved, a plan brokered by the federal government would give controlling interest of battered car maker Chrysler to the United Auto Workers (UAW) union. UAW would command a 55% stake, with Italian car company Fiat receiving 35%, and the government and Chrysler’s lenders left holding the remaining 10%. In return for its shares and getting a seat on the board, the UAW has agreed to accept about half of the $10.6 billion Chrysler owes to the union’s healthcare trust fund for retired workers.
The four major banks that hold more than 70% of Chrysler’s debt, totaling almost $7 billion, have agreed to accept only $2 billion in cash. But the company’s remaining debtors, comprised mostly of hedge funds, have not signed off on the agreement. If they balk, Chrysler could still wind up in bankruptcy court.
-Noel Brinkerhoff
UAW Members Ratify Chrysler Settlement Agreement (press release, UAW)
Chrysler's Fate Still Shaky Despite Deals (by Brady Dennis and Kendra Marr, Washington Post)
UAW Said to Get 55% Chrysler Ownership, Board Seats (By John Lippert and Mike Ramsey, Bloomberg)
UAW leaders Recommend Members OK Chrysler Deal (by David N. Goodman and Tom Krisher, Associated Press)
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