Sergio Marchionne Puts Pressure On Chrysler, CAW




In what is not at all an unforeseen move, Fiat has issued an ultimatum to Chrysler ahead of the Obama administration’s April 30th shotgun wedding deadline.

So what is it? Follow the jump for more.

The sticking point, it seems, is large pay scale concessions from the CAW and the UAW which Fiat CEO Sergio Marchionne has said are necessary stipulations in order for this deal to succeed. “Absolutely we are prepared to walk. There is no doubt in my mind…we cannot commit to this organization unless we see light at the end of the tunnel.”

Currently, members of the CAW and UAW earn more than their counterparts at nonunionized Japanese and German auto manufacturing plants throughout Canada and the US. The CAW has been more rigid than their US counterpart in their stance against the kind of pay cuts Chrysler has already demanded on its own. They’ve so far only agreed to a cut between $7 and $7.25 CAD an hour at their Windsor and Brampton, Ontario plants, which matches the one they’ve already agreed to with GM Canada. What Chrysler had requested was a $19/hr CAD reduction by the CAW to match what it’s paying UAW workers at US plants.

Currently, the outlook does not look rosy for a Fiat/Chrysler deal, with both Moody’s Corporate Finance predicting a 70% chance of bankruptcy and Mr. Marchionne himself discussing the different bankruptcy filing options in interview.

However, if this deal does beat the odds and go through, Marchionne also said that the 500 would likely be produced in and sold on North American shores as soon as 2010. Alfa Romeos would also be produced and sold here, including the 149 and their impending and as-yet-unnamed successor to the 159. (Hey, “Giulia” or “159-2″ are both perfectly fine by me, as long as it’s a properly lovely Alfa!)

[Globe and Mail]