Unions deal as Chrysler deadline looms
With just days left to complete deals to slash labor and debt costs or face bankruptcy, Chrysler has won union concessions aimed at paving the way for a deal with Fiat and the U.S. government to save the privately held automaker. The UAW said that deal must be ratified by Wednesday and meets conditions mandated by the Treasury as part of an emergency loan program for Chrysler. Treasury’s deadline is Thursday.
“The patience, resolve and determination of UAW members in these difficult times is extraordinary, and has made it possible for us to reach the agreement we will present to our membership,” UAW President Ron Gettelfinger said in a statement. The UAW represents about 26,800 Chrysler workers in the United States. The company also has a contract buyout offer on the table for those workers, which expires today. GM is expected to announce a fresh round of cost cutting later this morning.
The U.S. Treasury was expected to make a new debt restructuring offer to Chrysler’s lenders, who are owed $6.9 billion, as soon as today. Attention has shifted back to creditors. Whether they will show patience, resolve and determination remains a question. Whether doing so will produce a deal is an even bigger one.
Deals of the Day:
* American International Group has received second-round bids from three groups for its aircraft leasing business, valuing the unit at under $5 billion, a source familiar with the matter said.
* Shares of Japan’s Shinsei Bank and Aozora Bank soared after sources said the two money-losing lenders were in merger talks to form Japan’s sixth-largest bank.
* Japanese brewer Kirin agreed a $2.5 billion buy-out of Lion Nathan, Australia’s second-largest beer maker, in a move that could pave way for Kirin to expand further into Asian markets.
* Japan’s Mitsubishi Rayon said it aims to complete its buyout of unlisted British chemicals maker Lucite International by the end of May, saying antitrust authorities worldwide had given the deal the go-ahead.
* HSBC Private Equity and Actis Capital LLP are preparing rival bids for a stake in Franklin Offshore International, sources said, as struggling private equity firm 3i Group Plc seeks to sell its majority stake in the oil services company.
* Poland’s largest bank PKO BP may sell its minority stake in Bank Pocztowy as the state treasury fears a conflict of interest between the two, daily newspaper Gazeta Prawna quoted a state official as saying.
* Anheuser-Busch InBev has picked private equity firm Kohlberg Kravis Roberts & Co (KKR) [KKR.UL] as preferred buyer of South Korea’s Oriental Brewery (OB), a company official said, confirming a report.
* Japan’s NEC Electronics and Renesas Technology said they were in talks to merge next year to create the world’s third-biggest chipmaker after Intel Corp and Samsung Electronics.
(PHOTO: Fiat workers assemble cars at an automobile factory in the southern Italian town of Pomigliano January 30, 2009. REUTERS/Stefano Renna/Agnfoto)