Fiat Chrylser - US and Canadian Unions Approve Deal

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(ANSA) Rome, April 22 - American and Canadian car unions have approved a deal between Chrysler and Fiat, paving the way for the deal to go through, an Italian car union leader told ANSA Wednesday.

''The accord with the US and Canadian unions has been reached...and with the federal government which has pledged, given everyone's readiness, to persuade the creditor banks to accept the deal,'' said Bruno Vitali of Fim-CISL.He said the deal was ''90% ready'' and might even be announced by Fiat CEO Sergio Marchionne later Wednesday.Vitali said he had had a long talk in Detroit earlier Wednesday with United Auto Workers leader Ron Gettelfienger.

President Barack Obama has given Chrysler until May 1 to strike a deal with Fiat in order to have access to further federal bail-out funds and avoid bankruptcy.The deal in part hinges on unions and lenders accepting stock in Chrysler in exchange for the debt owed to them.An accord draft leaked to the press indicated that unions would take a 20% stake in Chrysler, the same as Fiat's initial stake, as payment for half their pension fund.Marchionne is also asking unions to accept wage cuts to bring labor costs in line with those in other plants in the US producing foreign cars, in states where the unions have less power.The leaked draft also indicated that Marchionne would serve as CEO for both Fiat and Chrysler, while the US automaker would have an American chairman of the board.In this case, it is not clear what would happen to Chrysler's current CEO, Bob Nardelli.Marchionne has been credited for what Obama has described as Fiat's ''impressive'' turnaround in the last few years and the authoritative daily Financial Times last week likened him to a ''superhero'' in a ''Chrysler cliffhanger''.

According to the draft accord, if a partnership is created then Fiat, unions and a federally appointed trust would name a future seven-man Chrysler board.The federal trust would initially hold a significant stake in Chrysler, in exchange for the bail-out funds, including a 15% share which Fiat would receive in 5% instalments as it meets production milestones.Fiat is offering its cutting-edge green technology and platforms for small cars in exchange for as much as 35% of Chrysler but it is likely to be also given an option to acquire up to 49% or more, once the bail-out loans have been repaid.The Italian automaker is keen to strike a deal with Chrysler because it would have access to its plants and dealerships in order to allow it to return to the American market, initially with Alfa Romeo and the trendy Fiat 500 city car.Chrysler, in turn, would have access to Fiat's facilities in Europe and Latin America.