If the Senate Banking Committee has its way in the attempt to save Chrysler Corp., the company's workers will become part-owners, and almost everyone involved will feel pain.
Under the terms of the extraordinary bill the committee approved Thursday night:
Employes would give up almost all the nearly one-third pay increase they are supposed to get over the next three years. This would cost them about one-sixth of their present purchasing power each year at current inflation rates.
Stockholders would have to give up 40 percent of their share in the company to the employes. The workers, in return for deferring their raises, would become owners.
Banks which now hold $400 million in shaky loans to Chrysler would have to lend it $400 million more and make other concessions, or risk seeing the company go under because of no government aid.
No party to the Chrysler crisis is very happy with this proposed solution. But with time running out -- the company probably will run out of money by late January without some outside help -- the Senate committee's bill or one like it may become law anyway.
And there is this consolation for those affected: they have little to lose.
If the company folds, the workers will not get their raises, the banks can kiss their loans goodbye, and Chrysler's stock, alredy depressed to $6 a share, will be worthless.If the bailout succeeds, the 60 percent the shareholders will have left may be worth more than the 100 percent they have now.
In addition to its other terms, the bill would give the Treasury secretary, joined by the comptroller general and chairman of the Federal Reserve Board, a considerable role in the management of Chrysler.
Even if the committee bill is softened as it moves along, some of the fundamental rearrangements it demands are considered likely to survive.
Reported out by a vote of 10 to 4, the committee bill is the work of what Chairman William Proxmire (D-Wis.) called his "two wide receivers" -- Sens. Richard Lugar (R-Ind.) and Paul Tsongas (D-Mass.), respectively a moderate Republican and a liberal Democrat who sit literally at far ends of the committee semi-circle. Their main idea was to make sure parties other than taxpayers assumed most of the risk in resurrecting the company.
One obvious problem now is whether the United Auto Workers would reopen recently concluded negotiations and concur in a wage freeze.
UAW lobbyist Howard Paster described the committee's wage freeze as "so unfair as to be unacceptable," and described himself as "less optimistic" than before about final passage of a plan the UAW can accept which would save Chrysler. He said "anti-union" senators "are laying the burden on us for saving the company . . .If the price of preserving the company and their jobs is not to feed their families and to give up their homes, it may not be worth paying." Advocates of employe-ownership say giving Chrysler workers 40 percent of the common stock "would have a good effect on productivity."
Paster and the UAW doesn't oppose the stock plan but said it is not a "fair tradeoff" for losing more than $1 billion of wages and benefits. "The stock equals less than a dollar for every five being asked to give up," he said.
Currently, the only major U.S. corporation with substantial ownership by workers is retail giant Sears, Roebuck & Co., of which employes own about 20 percent of common stock.
Stock ownership supporters, who have been growing in number in the Senate under the leadership of Finance Committee Chairman Russell Long (D-La.), argue that workers will get dividends as well as ownership when financial health returns to Chrysler.
Chrysler executives, who have not been enthusaistic about employe ownership, said they could 'live with" most of the Senate bill.
In the House, meanwhile, Chrysler dealers are buttonholing members on behalf of the House Banking Committee's $1.5 billion loan guarantees package, which includes a $50 million employe-ownership plan but no wage freeze. A floor vote had been scheduled for next week but congressional sources said the bill was pulled off the calendar "for a time," to gather more support. At a meeting of the House Republican Policy Committee, sharply divided members took no stand on the bill at all.
The House developments indicate some trouble for the aid package but passage is expected, with some amendments.
Assistant House Majority Leader John Brademas (D-Ind.) said he expects floor action in about two weeks. Senate action would follow -- close to a projected Dec. 21 adjournment date.