The Treasury Department’s deal earlier this month with Chrysler, calling for Fiat to take a 20% stake in the carmaker and for the United Auto Workers (UAW) to receive 55%, has been called everything from a sweetheart deal to a major concession for the union. The truth is, the deal represents the last best hope for Chrysler and its employees. There’s no guarantee of success, and the union will be in a constant struggle to keep the company’s jobs in the U.S. But the alternative was liquidation in bankruptcy, a guarantee of joblessness for all of the production workers, loss of retiree health benefits, reduced pensions, and a severe blow to the auto parts suppliers that sell to Chrysler. There has been criticism that the deal gives greater protection to the interests of the union’s retired members than to the interests of secured creditors, but this deal is both morally and economically sound. Chrysler’s survival ultimately depends on the efforts of the workers, who have agreed to multiple concessions in pay and benefits. Unlike the bondholders, who have no long-term interest in Chrysler, the workers’ economic future depends on the company’s success.
-Ross Eisenbrey