UPDATE 2-UAW trust intends quick sale of Chrysler stake

Tue May 5, 2009 2:02am BST
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* 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: Quote, Profile, Research).

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.  Continued...

 
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