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Fiat is about ready to walk away from a potential partnership with Chrysler says CEO Sergio Marchionne unless the U.S. automaker can significantly cut labor costs. While the United Auto Workers union has made it known that it is willing to work with Fiat and Chrysler management, the Canadian Auto Workers union isn't.

"From what I can tell from a distance, the CAW may have taken more rigid positions," said Marchionne in an interview with Canada's Globe and Mail newspaper.

Currently Chrysler and the CAW do not see eye-to-eye. The automaker has asked the union to cut labor costs by $19 CDN to $55 to match hourly wages in U.S. plants but the CAW will only go as far as reducing hourly wages by $7.25 (an amount GM workers agreed to recently).

Marchionne did not mince words in his interview with the Globe saying that a sense of entitlement in an organization that is technically bankrupt was nonsense and that the involvement of the U.S. and Canadian governments in a bailout plan was a sign of last resort for Chrysler.

Marchionne said that there is currently only a 50 percent chance the deal could go through. Meanwhile Moody's Corporate Finance recently said that Chrysler has a greater than 70 percent chance of going into bankruptcy.

Meanwhile the Obama administration's April 30th deadline is fast approaching.

More: Fiat Ready to Walk on Deal With Chrysler After Canadian Union Refuses to Budge on AutoGuide.com
 

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Uh oh...that's not good.
 

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Darn Unions!
 

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Wow thats a shock to hear that...surely Fiat cant and wont walk away just like that? They need the US market to launch the Alfa brand!
 

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They've lived w/o the North American market for 30 years, so they don't feel they need to union headaches to make the deal go through.

If I were the Fiat CEO, I'd walk, wait 90 days, let Chrysler file bankruptcy and break the unions, then come back in and pick up the pieces for pennies on the dollar and not have the union issue to deal with. Much cheaper and less hassle, then they could carve up Chrysler as they liked w/o gov't involvement.
 
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