UAW President: Chrysler Retirees May Have To Take More Cuts
05 Mai 2009 - 1:54AM
Dow Jones News
United Auto Workers President Ron Gettelfinger said there may be
more short-term cuts ahead for its Chrysler retirees as the union
waits to get and then quickly sell its 55% in the new company
created from the merger of Chrysler LLC and Italy's Fiat SpA
(FIATY).
"Right away its going to be tight and there may be more cuts,
but in the long run, we think the retirees will come out OK,"
Gettelfinger said in his first public appearance since Chrysler
filed for bankruptcy protection four days ago. He said there is
about $1.5 billion in the health-care trust, which the union won't
access until next year, and the first payment into the trust, which
is also slated for next year, will only be about $300 million.
All of Chrysler's UAW members are on temporary layoff after the
auto maker idled its plants Monday. The plants are slated to remain
closed for as much as 60 days while Chrysler reorganizes itself and
merges with Italian auto maker Fiat. UAW members agreed to deeper
cost-concessions in order to keep Chrysler out of bankruptcy.
However, the auto maker failed to win a reduction in its debt from
creditors.
Gettelfinger said the cost-concessions reached with Chrysler
will be used as a template when dealing with General Motors Corp.
(GM). Some of those concessions include the suspension of
cost-of-living allowances, elimination of Christmas bonuses and a
cut in holiday pay. Chrysler retirees also lost vision and dental
coverage. GM must still win cost reductions from the UAW as it
tries to secure more federal aid and avert a June 1 bankruptcy, and
Gettelfinger said work continues on concessions at GM.
He said the UAW will work fast to sell its equity in the new
Chrysler once the auto maker emerges from the bankruptcy process.
All proceeds from the equity sales will go to funding the
health-care trust also known as the Voluntary Employees Beneficiary
Association, or VEBA.
Gettelfinger also confirmed the UAW will have a board seat in
the new company but it won't have any voting rights. "We wish we
could have done better but of the options that were out there, this
(Fiat merger) was head and shoulders above the rest," he said.
"We thought we could keep this thing from going into
bankruptcy," Gettelfinger said, adding that he already had met with
Fiat CEO Sergio Marchionne several times.
-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@dowjones.com; 248-204-5542