Chrysler is making noises about getting the UAW, suppliers, and creditors in line so that it can go back to Congress with a restructuring plan. If the federal government likes that new program, Chrysler could get the money to carry it through the end of the year. According to Reuters, Chrysler's CEO recently sent a memo to employees saying "Progress is being made in our discussions with every constituent group, and we're especially pleased with the cooperative and productive discussions taking place,"
If the UAW and suppliers give concessions to Chrysler, they will almost certainly have to match them at GM (NYSE:GM) and Ford (NYSE:F). It would be especially hard for the union to treat the two other car companies differently, particularly with the government looking over its shoulder.
The news may appear to be good at first and may push up the shares of Ford and GM. But, it can't last. All of the restructuring assumptions from The Big Three rely on domestic vehicle sales to be about 12 million units this year. As the recession deepens, the number could go as low as 10 million.
In other words even if the job cuts and supplier deals come, all three operations are likely to lose a lot more money.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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