The UAW has agreed not to strike Chrysler LLC until September 2015.
The Detroit automaker has extended its contract with the union, according to documents filed yesterday in U.S. Bankruptcy Court in New York. Chrysler filed for Chapter 11 reorganization on April 30, and seeks to sell its valuable assets to a new automaker run by Fiat S.p.A.
The contract, approved April 29, extends the UAWs 2007 Chrysler agreement to Sept. 14, 2011. From that date until Sept. 14, 2015, any changes to labor agreements will be determined by binding arbitration.
Bloomberg News first reported details of the UAW agreement.
The contract says the UAW had agreed to accept $4.59 billion in cash plus a 55 percent stake in the Chrysler-Fiat partnership in place of the $10.6 billion that Chrysler owes a union retiree health care fund. .
Chryslers 26,000 U.S. hourly workers ratified the contract changes by a 4-1 ratio.
Fiats initial 20 percent stake would rise to 35 percent after meeting three milestones for bringing its vehicle technology to the United States.
The U.S. Treasury Department will maintain a 10 percent stake in the new Chrysler.
The health care fund, or Voluntary Employees Beneficiary Association, will nominate one Chrysler board member approved by the UAW, the contract says. Independent directors will vote the VEBAs Chrysler shares.
The agreement also confirms an April report by Automotive News that all new workers Chrysler hires until Sept. 14, 2015, can be paid entry-level wages.
The contract also reduces benefits, combines job classifications and creates stricter attendance rules. It says the company intends to persuade an additional 3,500 workers to leave voluntarily.
In an e-mail, a Chrysler spokeswoman declined comment. A UAW spokesman did not immediately return a phone call and an e-mail requesting comment.