Bankruptcy, What Bankruptcy? Chrysler and UAW Reach A Tentative Deal

For the past month most of the mainstream media has reported that President Obama was pushing hard for GM and Chrysler to file for bankruptcy. Despite the headlines, it's highly unlikely that the White House and Treasury Department would turn their backs on the union supporters who helped them win the presidency. Everyone knows that a bankruptcy filing would render the union contracts void. This is the last thing the unions want, especially in a weak economy that leaves them with little recourse on the bargaining table and that is why the UAW and Chrysler reached a tentative deal that received the blessing of the White House and Treasury Department earlier today.This deal will do nothing to help the long term viability of Chrysler. This will only ensure that they will be back on Capitol Hill begging for more taxpayer bailouts before the end of the year.

From the AFP :

The settlement agreement, which was subject to ratification by UAW members at Chrysler, was announced by the union and came closely after a separate deal was struck between the automaker and the Canadian Auto Workers (CAW) union.

The deal meets the requirement of Treasury loans to Chrysler, which is set to receive five billion dollars on top of the 13.4 billion dollars in loans already received from the US government, the UAW said.

It also includes "modifications to the union's 2007 collective bargaining agreement," the union said in a statement.

"Once again," said UAW vice president General Holiefield, "our active and retired members are being asked to make extraordinary sacrifices in order to help Chrysler return to viability."

UAW members are to vote on the plan by Wednesday, also the deadline set by the administration of President Barack Obama for Chrysler to reach a deal with Fiat or risk seeing government loans cut off.