Chrysler's 16,000 salaried retirees will start their fight this week
for their benefits in the automaker's bankruptcy restructuring, with
the potential to create a public relations headache for the company.

Salaried retirees promise a
different kind of problem than hedge funds, whose challenge to the
automaker's restructuring was undercut last week by a court order to
reveal their identity.

The retirees are numerous and sympathetic
compared to a few shadowy hedge funds which are easily branded by the
White House as speculators.

The constituents I represent are
salaried retirees who spent their career at Chrysler. They're willing
to negotiate but no one has talked to them, said Trent Cornell, an
attorney for Stahl Cowen in Chicago who is representing the National
Chrysler Retirement Organization (NCRO).

Cornell will ask the
judge this week to recognize a committee to represent nonunion
retirees. We're trying to get a voice to be heard and get some parity
with the union.

Chrysler has proposed selling its healthiest
operations to a new company owned by a union-aligned trust and Italian
carmaker Fiat , with small stakes held by the U.S. Treasury
and Canadian government. The new company will provide benefits for the
90,000 union retirees.

Other operations would remain in bankruptcy court and be used to satisfy unsecured claims, such as unpaid bills from suppliers.

250-page document related to the proposal sale makes virtually no
mention of nonunion retirees, and for the moment the retirees group
said they want clarification of their standing.

We don't know if
it's just a question of being overlooked because there were bigger
issues to consider, said Mike Aberlich, a spokesman for the NCRO,
which represents clerical staff, engineers and executives. We want to
hear clarity and have answers to salaried retiree benefits and whether
they move to the new company or not.

Cornell said the union and nonunion retirees should be in the same class in the bankruptcy and should be treated equally.

He said the group could ask Chrysler to form a trust that takes on their pension and benefits.

retirees are already feeling the pinch of the bankruptcy. Chrysler said
1,171 salaried retirees were not receiving the portion of their
benefits that did not qualify under IRS retirement rules for pre-tax

These benefits would remain as part Chrysler to satisfy creditors.

said salaried retirees benefits could be worth a couple hundred
million dollars and for the moment the NCRO was not trying to delay
the sale of the healthiest operations or slow down the bankruptcy.
However, he said that could change if the group's committee isn't
recognized by the court of if they can't discuss the issue with

Then we might have to get a little more aggressive.

A Chrysler spokesman said the company will address retire benefits through the bankruptcy process.