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UAW Gets Taxpayer Pensions, Healthcare

From the union loving New York Times:

Chrysler and Union Agree to Deal Before Federal Deadline


April 27, 2009

DETROIT — Union leaders said Sunday that they had reached an agreement with Chrysler that meets federal requirements for the automaker to receive more financing.

The deal includes Fiat, the Italian automaker with which Chrysler was ordered by the government to form an alliance before Thursday.

Neither the United Automobile Workers union nor the company released details of the tentative agreement, which would modify the union’s 2007 contract and reduce the amount of money Chrysler must pay into a new health fund for retirees.

The union plans to have its 26,000 Chrysler workers vote on the deal by Wednesday.

Chrysler said the agreement, reached during marathon negotiations over the weekend, satisfied the requirements laid out by the Obama administration for a deal by an April 30 deadline.

Even with the agreement, Chrysler is expected to seek Chapter 11 protection, in a case mapped out by the government in advance, including safeguards meant to protect worker benefits, people with knowledge of the company’s plans said Sunday night.

A new company would be set up with the best assets of Chrysler, these people said. Fiat of Italy would own 20 percent to 35 percent of the new Chrysler, they said, with the government also holding a stake. Some of the equity in the new company would also be given to Chrysler’s creditors as repayment.

These people spoke on condition of anonymity because the deals had not been finalized.

The Treasury Department has also reached an agreement with Daimler of Germany, the former owner of Chrysler, to settle tax and other claims left over from its sale of Chrysler in 2007 to Cerberus Capital Management, the private equity firm.

In order to persuade the union to back the sale to Cerberus, Daimler agreed to pay $1 billion to Chrysler if the company’s pension plans were terminated in a subsequent bankruptcy filing. Details of the Treasury’s deal with Daimler were not available.

Last week, the union reached an agreement in principle with the administration and Chrysler that would protect workers’ pensions in the event of a bankruptcy filing and provide for a change in the financing of a health care trust set up in 2007.

Under that pension deal, workers would lose some benefits after the bankruptcy filing but would receive more protection than they would with a Chapter 11 filing that lacked government direction, people with knowledge of the agreement said.

Chrysler, which has received $4 billion in federal loans, is in the final stages of a reorganization process ordered by the government, which includes a mandate to provide financing for half of all union retiree health care using company stock

Once again it is clear that the Obama administration’s bailout of the car industry was only about the government getting into position to protect the UAW’s fat benefits packages and pensions.

After all, it was union money that got him elected. So why shouldn’t he pay back the UAW with our taxpayer dollars? (Just like his ‘healthcare’ plan is a payback to the SEIU.)

And why should the UAW have to suffer, just because their preposterous demands and incompetence have driven the US car industry into the ground?

Fair is fair.

But just cogitate on the enormity of this sentence for a moment:

The deal includes Fiat, the Italian automaker with which Chrysler was ordered by the government to form an alliance before Thursday.

Look how far we have come in just 100 days.

Will we ever get our country back?

This article was posted by Steve on Monday, April 27th, 2009. Comments are currently closed.

6 Responses to “UAW Gets Taxpayer Pensions, Healthcare”

  1. Consilience says:

    “Will we ever get our country back?”

    No. Not as it was constituted when TAO took office…

  2. proreason says:

    This is a minor sidebar to the Rise and Fall of Freedom.

    More on that later.

  3. MinnesotaRush says:

    “The deal includes Fiat, the Italian automaker with which Chrysler was ordered by the government to form an alliance before Thursday.”

    I’m wondering out loud how much money the o-blah-blah gang is getting from Fiat in exchange for them “ordering” Chysler to “form an alliance” with them.

    When they did that, imagine how empowered Fiat got and how weakened Chrysler’s bargaining position became.

    I haven’t seen a thing yet that this o-blah-blah batch has done that has any positive merit; and .. all the while that very serious things are happening that threaten our very survival.

    This Trojan Horse presidency and administration is horrendous!

    • Odie44 says:

      Isn’t it odd that the labor issue was the reason Fiat did not move forward with the merger, just last Thursday?

      3 days later – and now a mandate from the failures in gov, led by Bambi and that miserable corporate failure Nardelli at the helm of Chrysler…

      I have asked a financial friend to get a hold of the merger, as soon as it is available – he will be looking for guaranteed provisions for Fiat, like options, warrants, prefferred stock vs common ownership, etc.

      Oh – and how did that Diamler-Chrysler merger go just a few years ago? After seeing their brand and sales get hammered to Pinto levels – Mercedes divested ASAP and are gradually regaining the premium brand they were known for…

  4. MinnesotaRush says:

    Just a side bar thing here .. don’t the Local 160 fellows in the photo look just delighted?!?! Probably a stock photo.

    I’m wonderin’ if o-blah-blah’s girl, Janet, has issued a “risk assessment for law enforcement” on this happy bunch??? Just askin’.

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