In this example of how to negotiate under pressure, it seemed to be an example of coolheaded dealmaking in the midst of disaster.
In 2009, battered by the 2008 financial crisis and shifting consumer preferences, U.S. automaker Chrysler was on the brink of collapse. The U.S. Treasury Department stepped in to negotiate a rescue. In exchange for roughly $12 billion in federal loans, Chrysler entered bankruptcy and agreed to a dramatic restructuring of its ownership.
A healthcare trust for Chrysler union workers—known as VEBA—received a 68% ownership stake in the company, along with a $4.59 billion note that eliminated Chrysler’s obligation to provide future retiree health benefits. The U.S. Treasury took a 10% stake, and the Canadian government received 2%.
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In a negotiation conducted under extreme time pressure, Italian automaker Fiat was awarded a 20% ownership stake and significant board and management influence. In return, Fiat agreed to contribute small cars, engines, and technology. Fiat also negotiated options to eventually acquire the U.S. and Canadian governments’ stakes and up to 40% of VEBA’s interest in Chrysler.
At the time, the deal was widely viewed as Chrysler’s last, best hope—and Fiat was cast as a white knight.
Fast-forward a few years, and the companies’ fortunes reversed. Chrysler returned to profitability, while Fiat struggled amid the European financial crisis. Seeking to strengthen its position, Fiat bought out the U.S. and Canadian governments’ stakes in Chrysler for $640 million in 2011.
In 2012, Fiat exercised an option to buy an additional 3.3% of Chrysler from VEBA. Using a $10 billion valuation of Chrysler—including the $4.59 billion note issued to VEBA during the bailout—Fiat calculated the stake to be worth $342 million. VEBA disagreed, arguing that Chrysler’s value should be calculated without counting the note.
The gap between the two sides amounted to roughly $202 million. The dispute went to court, with the parties working toward a settlement at the time.
The conflict stemmed from what Steven M. Davidoff later described in The New York Times as “a big hole in the language” governing how the option price should be calculated. The failure to specify a clear valuation method in the original 2009 bailout agreement has been characterized as a multibillion-dollar drafting error.
As time has passed, several deals negotiated hastily at the height of the financial crisis have revealed similar flaws. When disaster looms, negotiators often feel intense pressure to close quickly. Speed may feel essential—but it is frequently the enemy of a sound, durable agreement.
Fortunately, several safeguards can help protect you the next time you have to negotiate under pressure.
How to Negotiate Under Pressure
1. Think multiple steps ahead—every time
Negotiators often focus so intently on closing a deal that they overlook the long-term challenges of implementation, write Danny Ertel and Mark Gordon in their book The Point of the Deal.
This risk is magnified in crisis negotiations, where desperation can crowd out foresight. In the Chrysler case, negotiators were so focused on preventing collapse that they failed to consider what might happen if their efforts succeeded.
What if Chrysler recovered faster than expected?
What if Fiat later encountered financial trouble?
How would those shifts affect VEBA and retirees?
Thinking several steps ahead—rather than negotiating solely to survive the moment—might have revealed how future success could create new conflicts.
One practical tool is decision-tree analysis, which forces negotiators to map out possible future scenarios. Ertel and Gordon also recommend:
- Asking negotiators to explain how proposed contracts advance long-term organizational goals
- Linking incentives to early-stage implementation success, not just deal closure
Finally, “if–then” contingencies allow parties to agree today while accommodating differing predictions about the future.
2. Take a slower pace—even in a crisis
In emergencies, negotiators often feel obligated to move at breakneck speed. Yet urgency does not require haste.
An extreme illustration comes from hostage negotiations. Hostage takers are often individuals in emotional crisis who act impulsively. While emotions may be volatile at first, they tend to cool over time, writes Gary Noesner, former head of the FBI’s Crisis Negotiation Unit, in Stalling for Time.
As a result, experienced hostage negotiators treat time as their most valuable asset. By slowing the process, building trust, and avoiding artificial deadlines, they increase the odds of peaceful resolution.
Business negotiators under pressure can apply the same principle: move deliberately, not reflexively.
3. Closely monitor the deal-drafting process
After a complex negotiation, it’s tempting to hand off drafting to lawyers and move on. But this transition is a common source of costly mistakes.
Vague, missing, or contradictory terms are surprisingly common—and they often surface only during implementation, notes Guhan Subramanian. These problems are especially likely when lawyers are rushed or rely too heavily on boilerplate language from prior deals.
To reduce risk when negotiating under pressure, Subramanian recommends three safeguards:
- Explain your intent clearly
Share the motivations and priorities behind the deal so lawyers don’t have to infer them. - Read the documents carefully
Review drafts, memos, and final agreements to ensure they reflect what you believe was negotiated. - Have the deal read back in plain English
Ask your lawyers to explain the agreement without legal jargon and walk through hypothetical future scenarios.
Had negotiators done this in the Chrysler bailout, they might have identified the ambiguity around valuation that later fueled litigation.
Can you negotiate effectively under pressure? Share your insights and lessons learned in the comments.
Claim your FREE copy: Negotiation Skills
Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.
Prepare yourself. Always be ready and negotiation under pressure will no longer be the challange.