(SSource: Reuters via CNN)

Tentative agreement, aimed at cutting costs and keeping automaker out of bankruptcy, to be presented to workers for ratification.

Chrysler LLC and the Canadian Auto Workers (CAW) union reached a tentative agreement Friday on a new labor contract intended to cut costs and keep the struggling automaker from bankruptcy, the union said.

The deal, which will be put to CAW-represented workers for ratification this weekend, is one of several agreements that Chrysler needs to reach by next week to win new U.S. government aid and avoid liquidation.

“We were told by Chrysler that they still didn’t have entire deals done to avoid a bankruptcy filing. We urge all the stakeholders in the United States to make equal sacrifices,” CAW President Ken Lewenza told reporters.

Chrysler, which has been kept operating since the start of the year with $4 billion in U.S. government loans, has until the end of this month to clinch an alliance with Italy’s Fiat SpA and win concessions from its bank creditors and major unions or face a cutoff of its government funding.

“We are extremely grateful to the CAW leadership and to its hard-working members for their openness in this challenging environment to create a new strategy that will lead this company on a path to success,” Chrysler vice chairman Tom LaSorda said in a statement.

The tentative contract for Canadian autoworkers with the No. 3 U.S. automaker would leave hourly base pay intact but cut a range of benefits, including an annual Christmas bonus, and add flexibility to work rules that would make it easier for Chrysler to hire temporary workers.

Chrysler will also cut the third production shift at its Windsor, Ontario, minivan plant.

Taken together, the contract changes will save Chrysler an estimated C$240 million in annual labor costs, Lewenza said.

 (Source: Autoblog & Detroit Free Press)

As in a basketball game when players are yanking on jerseys trying to block each other out under the basket, General Motors and Chrysler’s creditors have officially begun jockeying for position. 

Michigan’s Attorney General, Mike Cox, has sent letters to the CEOs at both companies to ask that, if they file for bankruptcy, they do it in Michigan. Why? Because that would be more convenient to the creditors that GM and Chrysler have in Michigan.

“I am gravely concerned about the impact of any bankruptcy filing in a jurisdiction outside Michigan,” Cox wrote in separate letters to GM CEO Fritz Henderson and Chrysler CEO Bob Nardelli. 

Cox goes on to say that the financial health of both companies and Michigan have been intertwined for decades.

The state is a significant creditor for each of the troubled automakers through the Michigan Business and Single Business Tax obligations, workers’ compensation claims, unemployment insurance and environmental regulations. 

“The costs for many of these creditors (in Michigan) to participate in a New York or Delaware bankruptcy is overwhelming and would undoubtedly lead to unjust bills,” Cox said.

While Cox does not say that either company should file for bankruptcy, neither does he acknowledge that they might not need to if they meet certain criteria set by the U.S. Treasury Department.

“If you ultimately decide to choose bankruptcy as the vehicle to a stronger (company), I respectfully ask that you and your representatives meet with me before any filing is made,” the letter concludes. “Please feel free to contact me at any time, day or night, to discuss this matter.”

(Source: AutoBlog, New York Times, Jalopnik)

 REPORT: Bill Ford, Jr. “shocked” at Wagoner’s ousting…Some say GM taking government loans (as opposed to private sector loans) changed the rules, and the government needed to protect its investment; others say it was government interference. Regardless, the way things are going, we would be surprised if that were the last “shocking” development in the car industry saga.[Source: The Detroit Free Pre…

(Source:  Howard Wial, The Brookings Institution)

Government’s Auto Task Force is hiring, looking for Wall Street experience

Curious what it takes to be a member of the recently-created Auto Task Force? Thanks to an email sent out by Harry J. Wilson, a newly-hired Task Force worker, there’s no need to wonder. Some knowledge of the auto industry would reportedly be helpful, though prospective applicants and their family members cannot currently own any stock in the Detroit automakers or serve on any of the D-3’s boards of directors. Would-be applicants would also need to be “sufficiently intellectually and professionally nimble,” whatever that means, and have 8-12 years of experience on Wall Street.

According the Detroit News, the source of the Autoblog article,   “Harry J. Wilson, a new member of the task force, recently sent an e-mail that circulated on Wall Street, seeking applicants for up to four jobs on the autos team. The task force’s findings will help chart the government’s role in the future of the U.S. auto industry.  That message said the team was looking for up to two hires in each of two job categories: principal/vice president level and associate/analyst level. Candidates should have eight to 12 years experience and be “sufficiently intellectually and professionally nimble.” The analyst would have “the same skills,” with less experience.

“Our team is quite small,” said Wilson, formerly of Silver Point Capital and the Blackstone Group, in the March 13 e-mail obtained by The Detroit News. “The work is incredibly intense. The amount of work is massive, the timelines are tight and the level of focus is also very high.”

Click here to read the entire article.