UAW would get 55 percent stake in Chrysler under deal

DETROIT (Reuters) - The United Auto Workers union would own 55 percent of automaker Chrysler under a proposed contract union members must vote upon by Wednesday night, according to a summary of the deal prepared by the UAW.

If ratified by Chrysler's 26,800 UAW-represented workers, the company would also make payments to a union-aligned retiree health care trust in return for concessions by workers.

The summary, distributed to union hourly workers, also says Italian automaker Fiat SpA (FIA.MI) -- which is in talks with Chrysler on forming an alliance -- would "eventually own" 35 percent of Chrysler's stock.

Fiat would also share key engine technology with Chrysler that would be equivalent to an investment of more than $8 billion and would create 4,000 UAW-represented jobs.

Chrysler -- 80 percent controlled by private-equity firm Cerberus Capital Management LP CBS.UL -- is just two days away from a government-imposed April 30 deadline for slashing its debt and labor costs and consummating an alliance with Fiat in order to receive additional emergency federal loans.

Without those loans, the automaker faces potential liquidation.

"While we realize the proposed sacrifices for UAW members are painful, we fought to maintain our wages, our healthcare and our jobs," UAW President Ron Gettelfinger and Vice President General Holifield said in a letter to union members.

"In the face of adversity, we secured new product guarantees and we negotiated new opportunities for UAW involvement in future business decisions," they added.

Under the tentative agreement, Chrysler would issue a $4.587 billion note to the retiree health care trust.

The concessions the union has agreed to include new limits on overtime pay and the suspension of the cost-of-living-allowance.

Workers will also lose of Easter Monday holiday in 2010 and 2011, their performance bonuses in 2009 and 2010, and their Christmas bonuses in 2009 and 2010.

The 8,000-strong Canadian Auto Workers union ratified a deal with Chrysler last the weekend that should save the automaker C$240 million ($197 million) annually.

The U.S. auto industry is suffering through its worst sales in decades as American consumers have been battered by the recession and the credit crunch.

General Motors Corp (GM.N) has a June 1 deadline by which it must cut labor and debt costs, plus prove its viability as an ongoing concern, to receive fresh federal aid.

Ford Motor Co (F.N) has said it can weather the downturn on its own without government aid.

(Reporting by Nick Carey and David Bailey; editing by John Wallace)