Chrysler, CAW face midnight deadline

Negotiators for Chrysler and the Canadian Auto Workers raced today to reach a tentative deal on concessions that could help forge a merger between the teetering company and Italian auto giant Fiat SpA.

Union officials said the federal government has imposed a deadline at midnight tonight for a deal that would be part of a survival plan that would keep Chrysler Canada viable and allow it to qualify for about $2.9 billion in loans from the federal and Ontario governments.

The governments and the Obama Administration in the U.S. say they won't provide loans unless Chrysler merges with Fiat or someone else by the end of the month. The union and company negotiated throughout Tuesday night but the two sides are still significantly apart on resolving differences on the level of concessions in their existing contract.

Fiat wants to introduce some of its production practices in Canada and wants more concessions than what the union accepted at General Motors earlier.

CAW president Ken Lewenza told The Star earlier this week for the first time that the union would break the GM pattern on contract concessions at Chrysler so the company could complete a merger with Fiat and remain competitive here.

Chrysler is also negotiating concessions with the United Auto Workers in the U.S. but little information has surfaced on progress in those talks.

The auto maker, which could slip into bankruptcy court protection, is also seeking concessions from other stakeholders including bondholders who have rejected company offers.

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