Thursday, April 16, 2009

UAW to get ownership stake in Chrysler?

UAW, Fiat likely to hold key stakes in new Chrysler
by Luca Ciferri
Automotive News | April 16, 2009 - 11:29 am EST

TURIN, Italy -- The UAW and Italy’s Fiat S.p.A. could be Chrysler LLC’s leading shareholders if the struggling U.S. automaker wins the concessions requested by President Barack Obama’s automotive task force by April 30, a source close to negotiations told Automotive News today.

Stakes held by Chrysler’s existing shareholders -- majority owner Cerberus Capital Management LP and 20 percent minority owner Daimler AG -- would be “zeroed” as part of the financial restructuring, the source said.

The U.S. Treasury Department is discussing with Chrysler lenders a potential swap of part of their debts into equity.

A committee representing the big banks and financial institutions holding Chrysler’s $6.9 billion in secured debt rejected Treasury's initial offer to exchange their debt for $1 billion. The committee is preparing a counteroffer that will be presented within a few days, according to a source familiar with the lenders committee strategy.

The UAW could receive a significant stake in the bailed-out Chrysler -- even larger than Fiat’s initial 20 percent, the source said. This stake would come if...

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