When (and if) Chrysler emerges from bankruptcy, its workers will have an enormous stake in the new company. And, the UAW was able to secure protection for its members' health and pension benefits. The union had to make some initial concession for some impressive long-term potential gains and protections:
The U.A.W., for example, has received upfront protection from the Treasury Department for its pension plan and the fund that will take over responsibility for retiree medical benefits.The union did its job. Unions matter. Too many workers have been screwed over by corporate leaders because they had no one fighting for their interests. Corporate America, aided and abetted by the GOP, wants to keep it that way. The Democrats in the Senate need to make sure the Employee Free Choice Act passes this year.
Moreover, that fund, called the voluntary employee beneficiary association, or VEBA, will control 55 percent of the equity in the new Chrysler once it emerges from bankruptcy, and hold a seat on the Chrysler board.
Of course, those hard-fought gains, and the big ownership stake, could be worthless if Chrysler does not make it. And the company’s fortunes continued to sag in April, when sales fell 48 percent compared with the same month in 2008. Chrysler will also have to wait roughly two years or more for new cars designed by its partner, the Italian automaker Fiat, to show up in Chrysler dealerships.
But for now, even though Chrysler workers had to agree to lower pay and less generous benefits as part of the deal, the U.A.W. appears to be enjoying relative safety in helping steer the course of the Chrysler bankruptcy.
“I’m very comfortable,” Ron Gettelfinger, the U.A.W.’s president, said Friday on National Public Radio. “It’s not like we’re going into this bankruptcy fighting with Chrysler and Fiat and the U.S. Treasury. We’re going in there in lockstep to put our agreements in place.”
Labor and restructuring lawyers said such a comprehensive deal going into bankruptcy was rare.
“This is extraordinary, truly extraordinary,” said Mary Jo Dowd, a partner in the financial and bankruptcy restructuring practice at Arent Fox in Washington. “I never would have thought a year ago that this would occur. These are truly unusual times.”
Asked if he could recall any other union that fared as well, David L. Gregory, a labor law professor at St. John’s University, replied: “Nobody’s even close.”
