Chrysler Corp. its unions and creditors began moving yesterday to make the concessions and comply with other requirements in the $3.5 billion rescue plan that Congress approved early yesterday morning for the ailing company.
In Detroit, United Auto Workers president Douglas Fraser said the UAW's bargaining committee will meet Jan. 2 to discuss renegotiation of the union's recently signed contract with Chrysler. Congress required that the UAW gave up $462.5 million, or about a third of the pay raises it won in the contracts.
Meanwhile, the major banks with loans outstanding to the automaker were arranging to meet next week to work out new financing plans, including a possible "bridge loan" to tide the company over until new federal guarantees take effect.
Chrysler chairman Lee Iacocca has scheduled a press conference in Detroit this morning to outline the company's plans for meeting the complex requirements imposed by the new legislation.
The bill, which Congress passed as it went home for a five-week recess, would provide $1.5 billion in federal loan guarantees for the firm -- the largest bailout on record.
However, the loan guarantees would be contingent on about $2 billion in assorted concessions by Chrysler employes, creditors, dealers and suppliers, including the wage increases to be given up by the UAW.
Not all the concessions must be in loans or direct cash aid. In some cases, they could involve deferral of outstanding debts or other forms of credit. However, they all involve complex new legal arrangements.
President Carter is expected to sign the loan guarantee legislation imminently. The measure, which was supported vigorously by the administration, passed the House 241 to 124 and the Senate 43 to 34.
Perhaps the most critical element in the package is renegotiation of the UAW's new wage contract, a move that could face opposition among some segments of the rank and file.
Although union officials publicly grumbled about the $462.5 million concession, sources predicted privately that the new contract could be settled and ratified by late January, assuming there are no snags.
The union had been hoping to limit the congressionally required concession to $400 million, but the higher figure was decided in a compromise with an even more demanding Senate bill.The auto workers already have given up $200 million in a contract revision during the congressional debate.
In reality, UAW workers have little choice, however, since Chrysler's loans -- and their jobs -- depend on their acceding to the government's demands. Bargaining sessions with the company are expected to begin Jan. 6 or 7.
Reaction by the major figures in the Chrysler saga was predictable, although restrained lacocca issued a perfunctory statement. Fraser said grudgingly that meeting the new concessions would be "difficult."
Meanwhile, General Motors Corp. chairman Thomas A. Murphy, who earlier had opposed the Chrysler rescue plan, hailed yesterday morning's passage of the loan guarantee legislation to "good news" for the industry.
The question of whether Chrysler would be able to obtain interim financing to tide it over the next few weeks also appeared to ease some yesterday after Congress' action.
Several key figures in the banking industry, interviewed yesterday about Chrysler's prospects, said they now expect to see approval of a "bridge loan" to be repaid when permanent financing arrangements are completed.
"I don't think the banks have any alternative," one bank officer said. "If you have a situation where you will have total bankruptcy . . . or . . . interest being paid . . . that's a very easy choice."
UAW officials said the union would do everything possible to meet its required concessions quickly, but added it it was unlikely the cuts would effect either pension commitments or cost-of-living escalator clauses.