Chrysler must convince its unions in the United States and Canada to agree to further concessions — or face possible bankruptcy – but the Michigan-based automaker is likely facing an uphill battle on both fronts. Little progress has been made with the U.S.-based United Auto Workers, with Canadian Auto Workers’ president Ken Lewenza giving little indication things would be different north of the border.
The Obama administration has given Chrysler until April 30th to agree to a strategic alliance with Fiat and reach further concessions with its unions, or face possible bankruptcy. However, Chrysler has yet to strike a new deal with the UAW, with the CAW taking a wait-and-see stance before making a move of its own.
“There is an incredible amount of pressure on the CAW and obviously a significant amount of pressure on Chrysler Corp. to come to a resolution, hopefully this week, to qualify for the terms and conditions of the loans from government,” Lewenza told The Detroit News.
The CAW has taken a strong stance against further concessions, but Lewenza acknowledged the situation is “shifting enormously”.
Chrysler CEO Bob Nardelli revealed in a letter to employees last week that Chrysler Canada must reduce its hourly labor costs from $62.68 to $47 – the same rate Toyota Canada pays its employees – or risk a possible strategic alliance with Fiat. Fiat CEO Sergio Marchionne recently revealed his company is ready to walk away from a Chrysler alliance if the ailing automaker is unable to strike a more cost effective deal with its unions.
