DETROIT — Chrysler cleared another major obstacle to its survival Sunday when it reached a tentative deal for concessions with the United Auto Workers union.
The troubled automaker has a Thursday U.S. government deadline to gain concessions from its unions and debtholders and form an alliance with Italy’s Fiat or face almost certain liquidation.
The UAW announced the deal Sunday night, calling the concessions painful but saying the deal takes advantage of the Obama administration’s giving Chrysler and its workers a second chance.
The administration in February rejected Chrysler’s restructuring plan and said it could not stand on its own. The government gave the Auburn Hills, Mich., automaker until April 30 to make further cuts and sign a deal with Fiat.
The UAW deal is seen as a key piece of pulling Chrysler’s plan together, and it’s noteworthy that the UAW said Fiat was involved in the deal.
Chrysler has been living on $4 billion in U.S. government loans and is expected to get another $500 million. Without government help, it likely would have gone out of business around the first of the year.
After rejecting the original plan, the government had said the UAW and Canadian Auto Workers unions must make further concessions. The agreement’s ratification process has to be completed by Wednesday.
GM set to shut Pontiac
DETROIT — The storied Pontiac brand is dead and more factories and jobs are set to disappear, new casualties of a restructuring plan to help GM stave off bankruptcy protection.
The automaker will announce details today as it also asks bondholders to swap debt for stock.
Two people briefed on GM’s plan confirmed it includes the demise of Trans Am sports-car brand Pontiac, 83 years after the first Pontiac car was introduced. The Associated Press
