The UAW’s tentative contract at General Motors is too rich for Chrysler Group and too lean for the rank-and-file at Ford Motor Co. Hit the jump to read the rest of the story.
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That means the GM contract is unlikely to provide a pattern for contracts at Ford and Chrysler.
A source familiar with negotiations said the GM tentative contract is too expensive for Chrysler. And Chrysler CEO Sergio Marchionne said as much today at the opening of a dealership in Turin, Italy.
Marchionne — quoted by an Italian wire service, Agenzia Giornalistica Italia — said Chrysler and GM started these negotiations at different places financially.
“GM and us are in two completely different positions,” Marchionne said. “We were born in 2009, into very different situations. I had an 8-billion euro debt, they had a 50-billion dollar capital. Two very different situations.”
Marchionne is scheduled to return to the bargaining table on Tuesday and said he is confident a deal will be reached “quickly.” He declined to elaborate further on the talks.
The source said Chrysler was subject to an interest rate of 19.7 percent on its government loan, which was repaid earlier this year. The debt service on the government loans cost Chrysler about $2 billion over the two years, the source said.
Chrysler is also far less profitable and is sitting on a smaller pile of cash than its cross-town rivals – a situation that makes it harder to match the GM deal.
Chrysler, for example, wants a smaller signing bonus than the $5,000 signing bonus GM agreed to pay its 48,000 workers under the tentative agreement.
