Fiat CEO Sergio Marchionne at a news conference in March after shareholders' meeting in Turin, Italy. Fiat CEO Sergio Marchionne at a news conference in March after shareholders' meeting in Turin, Italy. (Massimo Pinca/Associated Press)

The CAW has ruled out any special concessions for ailing automaker Chrysler, despite a threat that potential saviour Fiat could walk away, the union's president said Wednesday.

Canadian Auto Workers president Ken Lewenza said his union would bargain with Chrysler for a deal similar to the one struck with General Motors earlier in the year.

The GM agreement was worth approximately $7 a hour in reduced labour costs. Chrysler, however, said it needs savings in the range of $20 a hour to stay in business.

And Sergio Marchionne, the head of Italian automaker Fiat, told the Globe and Mail that Chrysler has until the end of this month to substantially cut its labour costs as a condition of forming a partnership.

Chrysler and Fiat are currently negotiating a partnership that would rescue the American car maker.

Lewenza said, however, giving Chrysler a better deal would end up hurting GM.

"We always said that the economic pattern is important to the auto industry to make sure that one company doesn't have an advantage or a disadvantage, but we also said to Chrysler that we'll use our creativity, the same as we've done in the past, to increase productivity and increase the bottom line at Chrysler without touching the economic pattern," Lewenza told a press conference Wednesday.

Historically, the CAW makes somewhat similar deals with the three domestic automakers, a pattern that keeps sector labour costs equal.

Fiat's threat

Reportedly, Fiat will end talks without large cost reduction.

"Absolutely we are prepared to walk," Fiat's Marchionne said. "There is no doubt in my mind."

Fiat wants the unions in Canada and the United States to agree to match the lower wages at Japanese and German car plants.

The U.S. government has given Chrysler until the end of April to negotiate a partnership with Fiat, or face the prospect of a bankruptcy filing or liquidation.

with files from The Canadian Press