Apr 15, 2009 -
Deal Breaker?
Chrylser is definitely in dire straights Fiat is putting on the pressure if what I found on MarketWatch this morning is any indication.
LONDON (MarketWatch) -- Italian carmaker Fiat will walk away from Chrysler unless the U.S. carmaker Canadian and American unions agree to significantly reduce labor costs by the end of the month, Fiat Chief Executive Sergio Marchionne told Canadian newspaper the Globe and Mail in a interview published on Wednesday. A deal with Fiat is Chrysler's last chance to avoid a bankruptcy filing and possible liquidation. Fiat, however, is prepared to abandon a deal unless workers at Chrysler's North American plants agreed to match the lower labor costs of Japanese and German plants. At the end of March, the U.S. auto task force gave Chrysler 30 days to complete an alliance with Fiat or face a cut-off of the government funding on which it is subsisting.
This all seems to be coming down to the big problem for Detroit, labor costs. And like it or not, the UAW is facing more and large concessions, voluntary or not.
