Negotiation Case Studies April 27, 2009

Update: Chrysler Reaches Agreement

Last Friday, we talked about whether a deadline would help Chrysler reach an agreement. Today, we have an answer.

It seems that on Sunday, Chrysler was able to resolve some issues with labor, reaching a concession agreement with the UAW. Here’s the story:

http://news.yahoo.com/s/ap/us_chrysler_labor.

Negotiations are still ongoing with Fiat and Chrysler’s debtors, but things are looking up for the automaker, which may be able to avoid bankruptcy after all.

As a Deadline to a negotiation approaches concessions and the magnitude of concessions often increase. If the Deadline is real -- as this one appears to be -- participants will often start making riskier decisions.

At a Deadline one negotiating option is to simply halt the talks and walk away. It appears that this option probably is not available to Chrysler or its unions.