The United Auto Workers union will now own the largest share of Chrysler LLC, as the auto industry meltdown begins to get seriously loony: UAW Said to Get 55% Chrysler Ownership, Board Seats.

Anyone over there ever heard of a “conflict of interest?”

April 28 (Bloomberg) — The United Auto Workers union’s retiree health-care fund will own 55 percent of Chrysler LLC in exchange for cutting in half the automaker’s $10.6 billion cash obligation to the trust, people familiar with the matter said.

Under the terms of the contract, the trust would get representation on the company’s board of directors, said two people briefed on the deal, who asked not to be named because the matter is private.

The tentative agreement was approved unanimously by UAW leaders yesterday and will be sent to union locals for ratification, one of the people said.

(Hat tip: Chris.)