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UAW Would Own 55% of Chrysler Stock Under Deal

The United Auto Workers union would eventually own 55% of the stock in a restructured Chrysler LLC under the deal reached by the union and the auto maker, according to a summary of the agreement that was reviewed by the Wall Street Journal.

According to the summary, Chrysler will also issue a $4.59 billion note to the health care trust fund that the union will manage for retired workers. The agreement says Chrysler will pay $300 million in cash into the trust fund in 2010 and 2011, and increasing amounts up to $823 million in the years 2019 to 2023.

The trust fund will also own a “significant” amount of Chrysler stock and will be allowed to appoint a representative to Chrysler’s board, the summary says. In the future the trust fund will be allowed to sell the stock to other parties, it says.

The UAW accord is likely to provide the blueprint for deals at General Motors Corp., and possibly Ford Motor Co., said labor experts, dealing the union a broader setback. In addition to cuts in wages and benefits, the loss of members and their dues, due to the shutdown of union factories, will shrink the union’s clout, giving it less money for organizing and political operations. On Monday, GM said it would eliminate 21,000 hourly-wage jobs.

“This will make it more difficult to do the things that the union is known for: organizing, political action, bargaining and community development,” said John Russo of the Center for Working-Class Studies at Youngstown University.

The Government and the unions will pretty much own the car makers.

Kill them now, while there is still time.