The government's Chrysler Loan Guarantee Board will tell leaders of the United Auto Workers union today they will have to make major wage concessions to keep Chrysler in business, administration sources said yesterday.
Chrysler has asked the board, headed by Treasury Secretary G. William Miller, to approve $400 million in new, federal guaranteed loans -- a cash infusion that automaker must have to remain solvent.
As part of its new financial plan, Chrysler has asked the UAW to accept a 21-month wage freeze, which would save the company some $600 million. Although the union has agreed to renegotiate its current three-year contract with Chrysler, it has insisted on hearing first-hand from the loan guarantee board that the wage sacrifices are essential.
By waiting for today's meeting with the loan board, the UAW leadership has all but assured that the final decision on the new Chrysler loan guarantees will fall to the Reagan administration.
Following today's meeting, UAW officials expect to sit down with Chrysler's representatives and negotiate terms of a new wage agreement. The union has already agreed to some $460 million in concessions as part of the Chrysler aid package, but company chairman Lee A. Iacocca says that further aid is essential.
Assuming the company and the UAW reach an agreement, it must be approved by Chrysler's UAWworkers, who are not expected to return to Chrysler plants until next Monday, following a holiday shutdown.
Once the board approves the $400 million guarantee, Congress is given 15 days to review the decision and to block it, if it chooses. Although Miller has plainly indicated he wants to help Chrysler if he can, the Carter administration is not rushing to put its stamp of approval on the latest installment of Chrysler financial aid. And by the time the 15-day review period has run its course, the Reagan administration is likely to be in office.