Chrysler LLC has struck a deal with the United Auto Workers, under which the union will own 55 per cent of the carmaker, The Wall Street Journal reported citing a summary of the agreement.

Fiat SpA "eventually" will own 35 per cent in Chrysler while the US government and the company's secured lenders will together own the remaining 10 per cent stake after the reorganisation, the report said.

Workers affiliated to the UAW will vote on the proposed agreement, which requires changes to the union's current Chrysler contract.

UAW president Ron Gettelfinger and vice president General Holiefield met the media following a meeting of the UAW Chrysler council on 27 April in Sterling Heights, Michigan.

"It got unanimous support from the delegates. So, we're really looking forward to getting out in the field and telling this story.... We would call on all the other stakeholders to do the same thing and hopefully we can get this thing concluded,'' Gettelfinger said.

"We've been though negotiations here with Chrysler, with Cerberus with Fiat with Daimler, and indirectly with the banks. It's the most difficult and challenging situation that we've found ourselves in, probably in the history of our union,'' he said, adding, ''We want to be very transparent, and make sure people know what's in there - we're very confident that they will ratify the agreement, because the alternative is bankruptcy, which we certainly don't want to be a part of."

Chrysler will also issue a $4.59 billion note to the health-care trust fund that the union will manage for retired workers. The agreement said Chrysler will pay $300 million in cash into the trust fund in 2010 and 2011, and increasing amounts up to $823 million in the years 2019 to 2023.

The trust fund will own a "significant" amount of Chrysler stock and will be allowed to appoint a representative to Chrysler's board, the summary said.
"While we realise the proposed sacrifices for UAW members are painful, we fought to maintain our wages, our health care and our jobs,"  Gettelfinger wrote in a letter with the summary.

UAW said the accord would provide the union with regular updates from the company on its long-term strategy and product plans.

Meanwhile, Daimler AG has agreed to give up its remaining 19.9 per cent stake in Chrysler LLC and pay as much as $600 million into the auto maker's pension fund, for Chrysler to meet US treasury's deadline for  a viability plan.

Daimler's 19.9 per cent stake will be turned over to Chrysler's parent, Cerberus Capital Management LP. That will, in turn, allow Cerberus and Chrysler to intensify negotiations on a merger deal with Fiat.

Chrysler needs the Fiat merger as well as cost concessions from its debt holders and the United Auto Workers to receive more US aid and avoid bankruptcy.

Chrysler and Cerberus also agreed to waive claims arising from Daimler's August 2007 sale of Chrysler to Cerberus.

UAW leaders on their part have agreed to a suspension of cost-of-living-adjustments and new limits on overtime pay. Workers will only be paid for overtime after they have worked at least 40 hours in a week. They will also surrender their Easter holidays in 2010 and 2011.

Fiat has, in the meantime, agreed to manufacture at least one small car in a Chrysler plant in the US, and to allow Chrysler use its 3.0-liter diesel engine and a 1.4-liter gasoline engine.

Chrysler will provide the UAW with quarterly updates and contributions by ''executives, CEOs, dealers, suppliers and other constituents."

Analysts, meanwhile, said the agreement, once voted by workers, would sound the end of UAW as a force to reckon with. But, the concessions would workers' pay and benefits at Chrysler closer to those earned by workers at factories operated by rivals Honda Motor Co and Toyota Motor Corp.