Economics: UAW to own Chrysler? What the heck? Its complicated...

When the big 3 auto companies were on the edge of collapse last year, I figured there would be some bailouts. But I also thought, maybe, the government might let the weakest one go bankrupt. After all, in the end, maybe the USA can't really support three auto makers.

So when I heard the news that Chrysler was going to bankrupt, I thought, well, I guess they were the weakest one and going to the chopping block was necessary.

But then I read the "fine print" after hearing Congressman John Campbell (used to work in the auto business before going to the House) on the HH show say that the UAW will now own Chrysler!

What?

Didn't the unions help crash the auto business?

Excerpt from the CNN piece:

The UAW announced late Wednesday night that its membership at Chrysler had overwhelmingly ratified the agreement reached between the company and union leadership on Sunday night.

As a result of that deal, the UAW will own 55% of Chrysler. Fiat will own a 20% stake with the option of increasing it to 35%. The U.S. government will own 8% and Canada will have a 2% stake.
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In addition, GM faces a government-imposed deadline to restructure by the end of May or it too could be forced into bankruptcy.

Maybe there is a good reason for the arrangement but my first reaction to this detail is, what the heck?

Can someone please explain?

UPDATE: Its complicated! Looks like the initial 55% ownership is a capital raising measure only. The article says the UAW will get only 1 member on the board that will run Chrysler. Additionally, if the company recovers, it is likely that those shares would be sold to recover money to cover the cost of health care for the retirees.

Excerpt:

DETROIT – The United Auto Workers union would appear to be the big winner in the Chrysler bankruptcy saga, having exercised its considerable political muscle to win a 55 percent stake in the country's third-largest automaker. But when you consider the 55 percent is in a company that lost $16.8 billion last year and has seen its sales drop by half, the victory seems less impressive. Especially since the union's stock must necessarily be converted at some point to cash to pay billions of dollars in retiree health care bills over the next 25 years.
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Unions have in the past traded an ownership stake in a struggling company for wage cuts or other money-saving steps. For the most part the deals, such as an employee stock ownership plan at UAL Corp., parent of United Airlines, have worked well at first, only to fall apart when economic times grew tough, with labor and management fighting as profits declined.
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Fiat is a likely buyer for at least part of the UAW shares, should they gain value. Under its deal with Chrysler, the Italian automaker takes an initial 20 percent stake in exchange for small-car technology. That can rise to 35 percent as goals are met, and Fiat has options to bring its stake up to 51 percent.