Creditors now have to make concessions

By Nick Carey | April 27, 2009, Monday |

Print Edition

WITH just days to go for Chrysler LLC to reach agreements to cut labor and debt costs or face bankruptcy, members of Michigan's Democratic congressional delegation said on Saturday the onus was now on the United States auto maker's creditors to make concessions.

"The unions have come to the table over and over and over again and have taken huge cuts," said Senator Debbie Stabenow on the sidelines of a Michigan Democratic Party fundraising event in Detroit, the heart of the beleaguered US auto industry.

"It is now incumbent on the creditors, in particular those that have taken public funds, to make some concessions and be a part of the solution," Stabenow said.

Chrysler, which is about 80 percent-controlled by private-equity firm Cerberus Capital Management LP, faces a Thursday deadline by the Obama administration to reach cost-cutting deals and cement an alliance with Italian carmaker Fiat SpA.

If the auto maker fails to do that, Chrysler could see further US government support withheld and face potential liquidation.

Michigan Democrats said the announcement on Friday of a tentative concession deal between the Canadian Auto Workers union and Chrysler showed the unions were acting in good faith and it was now up to the creditors to follow suit.

The CAW deal would reduce hourly labor costs by C$19 (US$15.70) and save Chrysler about C$240 million annually in various benefits.

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Creditors now have to make concessions

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