UAW Opposes Sale of Chrysler
05-01-07, 12:02 PM
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Lexus Fanatic
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UAW Opposes Sale of Chrysler
UAW presses Daimler to call off Chrysler sale By Kevin Krolicki and Poornima Gupta
Wed Apr 18, 5:42 PM ET
AUBURN HILLS, Michigan (Reuters) - United Auto Workers President Ron Gettelfinger, who sits on DaimlerChrysler AG's (DCXGn.DE) board, said he would press the German automaker to keep its Chrysler Group unit.
Gettelfinger, speaking to reporters on Wednesday at Chrysler's headquarters, said the union believed it was still an option for Daimler to retain Chrysler despite a sale process that began in February and has been credited with sending DaimlerChrysler shares sharply higher since.
"It's going to be a push but we still think that's an option," said Gettelfinger, who heads Chrysler's largest union. "I am going to continue to make the case. I believe we are better off where we are at. We have a lot of support on the supervisory board."
Chrysler Chief Executive Tom LaSorda declined to comment on the UAW's position, saying only that "all options" remained open regarding the division's future.
"I'll just say this: discussions continue," LaSorda told reporters at a briefing at Chrysler's headquarters here.
The comments on Chrysler's future were the strongest yet from the UAW, which analysts see as having the potential to complicate or stall the sale process as contract talks with Chrysler and other Detroit automakers begin this summer.
Gettelfinger's remarks came on the same day Chrysler announced plans for two new plants in Michigan: a $730-million engine plant in Trenton and a $700-million axle plant in Marysville.
LaSorda said the investments, which are aimed at shaping a more fuel-efficient vehicle line-up were necessary for Chrysler's turnaround, regardless of the sale process.
"We can't just sit back and wait a week or two weeks or a month or six months to see what's going on," he said. "We have got to forge ahead."
Gettelfinger said talks with Chrysler over potential health-care concessions remained underway after the UAW declined last year to offer Chrysler a cost-saving package similar to the one it granted larger rivals General Motors Corp. (NYSE:GM - news) and Ford Motor Co.(NYSE:F - news)
Shares of DaimlerChrysler closed down 65 cents at $81.97 on the New York Stock Exchange. The stock remains up 27 percent since the February 14 announcement that Daimler was considering a sale of Chrysler.
'STRIP AND FLIP'?
Representatives of DaimlerChrysler have been meeting with several potential buyers for Chrysler in recent days. Bidders for Chrysler include private equity firms Cerberus Capital Management, Blackstone Group (BG.UL) and Canadian auto parts maker Magna International Inc. (Toronto:MGA.TO - news) as well as billionaire Kirk Kerkorian.
But Gettelfinger, who said he has met with and talked to potential Chrysler buyers, said the UAW was opposed to any bid from "strip-and-flip" investors.
"I am very concerned about equity companies moving more and more into the industry," he said. "They are hovering overhead right now."
For his part, LaSorda said that Daimler and Chrysler planned to continue their cooperation. In one example, the new Michigan axle plant is scheduled to produce parts for Daimler vehicles as well as Chrysler vehicles.
Some observers questioned the timing of the new Chrysler plants and whether they could be reversed by new owners.
"We believe that should Chrysler end up being sold to private equity, the likelihood of the (axle) plant actually being built would be reduced significantly," Lehman Brothers analyst Brian Johnson said in a note for clients on Wednesday.
But Erich Merkle, an analyst with IRN Inc., said he expected that Daimler could still opt to keep Chrysler, despite intense shareholder pressure, if bids for the unit fall short of its expectations and the UAW offers further concessions.
Daimler paid almost $40 billion for Chrysler in 1998, but Kerkorian's bid -- the only offer to be made public -- values the unit at just $4.5 billion.
In addition, Merkle said, Daimler could bank on an improvement in Chrysler results with the summer launch of new versions of Chrysler's best-selling vehicles, its minivans.
"It's very possible that Daimler could still own Chrysler a year from now after all of this is cleared up," he said.
The axle and engine plant investments were the first actions taken by Chrysler under a plan it announced in February that it would spend some $3 billion to build and retool plants in order to make more fuel-efficient engines.
Chrysler lost nearly $1.5 billion in 2006 as inventories mounted and consumers shifted away from the light trucks and sport utility vehicles that accounted for nearly 70 percent of its total sales.
The automaker is moving ahead with plans to cut 13,000 jobs as it seeks to return to profitability by 2008.
Wed Apr 18, 5:42 PM ET
AUBURN HILLS, Michigan (Reuters) - United Auto Workers President Ron Gettelfinger, who sits on DaimlerChrysler AG's (DCXGn.DE) board, said he would press the German automaker to keep its Chrysler Group unit.
Gettelfinger, speaking to reporters on Wednesday at Chrysler's headquarters, said the union believed it was still an option for Daimler to retain Chrysler despite a sale process that began in February and has been credited with sending DaimlerChrysler shares sharply higher since.
"It's going to be a push but we still think that's an option," said Gettelfinger, who heads Chrysler's largest union. "I am going to continue to make the case. I believe we are better off where we are at. We have a lot of support on the supervisory board."
Chrysler Chief Executive Tom LaSorda declined to comment on the UAW's position, saying only that "all options" remained open regarding the division's future.
"I'll just say this: discussions continue," LaSorda told reporters at a briefing at Chrysler's headquarters here.
The comments on Chrysler's future were the strongest yet from the UAW, which analysts see as having the potential to complicate or stall the sale process as contract talks with Chrysler and other Detroit automakers begin this summer.
Gettelfinger's remarks came on the same day Chrysler announced plans for two new plants in Michigan: a $730-million engine plant in Trenton and a $700-million axle plant in Marysville.
LaSorda said the investments, which are aimed at shaping a more fuel-efficient vehicle line-up were necessary for Chrysler's turnaround, regardless of the sale process.
"We can't just sit back and wait a week or two weeks or a month or six months to see what's going on," he said. "We have got to forge ahead."
Gettelfinger said talks with Chrysler over potential health-care concessions remained underway after the UAW declined last year to offer Chrysler a cost-saving package similar to the one it granted larger rivals General Motors Corp. (NYSE:GM - news) and Ford Motor Co.(NYSE:F - news)
Shares of DaimlerChrysler closed down 65 cents at $81.97 on the New York Stock Exchange. The stock remains up 27 percent since the February 14 announcement that Daimler was considering a sale of Chrysler.
'STRIP AND FLIP'?
Representatives of DaimlerChrysler have been meeting with several potential buyers for Chrysler in recent days. Bidders for Chrysler include private equity firms Cerberus Capital Management, Blackstone Group (BG.UL) and Canadian auto parts maker Magna International Inc. (Toronto:MGA.TO - news) as well as billionaire Kirk Kerkorian.
But Gettelfinger, who said he has met with and talked to potential Chrysler buyers, said the UAW was opposed to any bid from "strip-and-flip" investors.
"I am very concerned about equity companies moving more and more into the industry," he said. "They are hovering overhead right now."
For his part, LaSorda said that Daimler and Chrysler planned to continue their cooperation. In one example, the new Michigan axle plant is scheduled to produce parts for Daimler vehicles as well as Chrysler vehicles.
Some observers questioned the timing of the new Chrysler plants and whether they could be reversed by new owners.
"We believe that should Chrysler end up being sold to private equity, the likelihood of the (axle) plant actually being built would be reduced significantly," Lehman Brothers analyst Brian Johnson said in a note for clients on Wednesday.
But Erich Merkle, an analyst with IRN Inc., said he expected that Daimler could still opt to keep Chrysler, despite intense shareholder pressure, if bids for the unit fall short of its expectations and the UAW offers further concessions.
Daimler paid almost $40 billion for Chrysler in 1998, but Kerkorian's bid -- the only offer to be made public -- values the unit at just $4.5 billion.
In addition, Merkle said, Daimler could bank on an improvement in Chrysler results with the summer launch of new versions of Chrysler's best-selling vehicles, its minivans.
"It's very possible that Daimler could still own Chrysler a year from now after all of this is cleared up," he said.
The axle and engine plant investments were the first actions taken by Chrysler under a plan it announced in February that it would spend some $3 billion to build and retool plants in order to make more fuel-efficient engines.
Chrysler lost nearly $1.5 billion in 2006 as inventories mounted and consumers shifted away from the light trucks and sport utility vehicles that accounted for nearly 70 percent of its total sales.
The automaker is moving ahead with plans to cut 13,000 jobs as it seeks to return to profitability by 2008.
05-01-07, 12:28 PM
#2
Zombie Slayer
I love the way the Union is NOW concerned with the automotive manufacturers direction!!!! HAHA!!
I happen to work for Cerberus Capital Management. UAW is frightened that there could actually be an owner with the cajones to stand up to the unions for once. They see the gravy train running out and are now scampering like rats on a sinking ship.
I happen to work for Cerberus Capital Management. UAW is frightened that there could actually be an owner with the cajones to stand up to the unions for once. They see the gravy train running out and are now scampering like rats on a sinking ship.
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