Fiat CEO says unions may kill Chrysler deal

Saying there is now only a 50 percent chance that an alliance will be formed, Fiat CEO Sergio Marchionne says the Italian automaker may abandon the proposed partnership unless the unions agree to substantial cost reductions.

“Absolutely we are prepared to walk,” Marchionne said in an interview published yesterday on the website of Canada’s Globe and Mail. “We cannot commit to this organization unless we see light at the end of the tunnel.”

Marchionne was most critical of the Canadian Auto Workers saying they have taken “more rigid positions.” He said the unions need to realize that the U.S. and Canadian governments are the lenders of last resort.

Marchionne went on to say there is no “Plan B” if the Chrysler alliance falls through. He said Fiat is not interested buying Saturn from GM or picking up Chrysler assets from liquidation sale.