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UPDATE 2-UAW trust intends quick sale of Chrysler stake
* Healthcare trust would plan to sell shares quickly
* UAW concessions dramatically improve Chrysler cash flow
* GM-UAW deal not likely to differ from UAW-Chrysler pact (Adds quotes from UAW president, background, byline)
By Soyoung Kim
DETROIT, May 4 (Reuters) - A United Auto Workers-aligned healthcare trust would work quickly to sell shares it would receive in a new Chrysler as soon as it in a position to do so, union President Ron Gettelfinger told reporters on Monday.
The UAW healthcare trust would receive a 55 percent stake in a new Chrysler, but no voting role on the board, under a sale plan the automaker filed with the U.S. Bankruptcy Court late Sunday that would speed the bankrupt automaker's alliance with Italy's Fiat SpA (FIA.MI).
Fiat would hold a 20 percent stake in the new Chrysler, but control the automaker, which also would be 8 percent held by the U.S. government and 2 percent by the Canadian government. Fiat Chief Executive Sergio Marchionne is expected to take a central role on overseeing the new Chrysler.
Gettelfinger said the healthcare trust, a Voluntary Employee Beneficiary Association, would be very stressed initially through its acceptance of Chrysler equity for part of the funding of the trust.
In its historic agreement to establish the healthcare trust in 2007, the UAW accepted roughly 60 cents cash to cover projected obligations and the latest concessions make half that funding in Chrysler equity and stretch the cash payments.
Benefits to UAW retirees will be reduced from July 1 due to the initial tightness on funding of the trust.
"As you can see as soon as the VEBA's in a position to where we can sell stock, we will be required to sell stock in order to keep the benefits going," Gettelfinger said in his first press conference since Chrysler filed for bankruptcy protection on Thursday in Manhattan.
"Now the first couple of years, it's going to be tight," Gettelfinger said, adding that the healthcare trustees would have the authority to make cuts in retiree benefits if necessary to keep the trust viable.
Chrysler has been about 80 percent controlled by Cerberus Capital Management [CBS.UL] since August 2007 when the private equity firm acquired the stake from Daimler AG (DAIGn.DE). Daimler retained the remaining stake in Chrysler.
Gettelfinger was speaking at a hotel near Chrysler's Sterling Heights Assembly plant, one of several facilities not planned to move on to the reorganized Chrysler.
The Sterling Heights plant builds mid-sized Chrysler Sebring and Dodge Avenger cars that have not sold well and was a focal point of members who opposed the 2007 contract.
"If Mr. Marchionne comes in here and turns this company around, then we should be in pretty good shape, and ... maybe even add some of the benefits back, but we've first got to get there," Gettelfinger said.
Gettelfinger said the union's concessions to Chrysler would improve the automaker's cash flow dramatically, providing "billions and billions" of dollars of relief.
He also said that he did not expect the agreement between the union and Chrysler to differ greatly from one the UAW must complete next with General Motors Corp (GM.N). (Reporting by Soyoung Kim and Michael Strong, writing by David Bailey)
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