The Wall Street Journal is reporting that the private equity firm Cerberus has won the bidding for Chrysler. DaimlerChrysler (NYSE: DCX), which will probably change its name, will hold a small stake in the new holding company. Cerberus bought the majority of GMAC from General Motors (NYSE: GM) last year.
Aside from what Cerberus pays for the U.S. car company, which may be very little, the key to the transaction will be that Daimler will move the $18 billion of Chrysler pension and benefits obligations off of its books.
The UAW is bound to try to derail the deal. They favor having Daimler keep Chrysler or sell it to Canadian car parts company Magna International (NYSE: MGA). In either case, the union believed it could hold on to more jobs. The UAW may now be faced with trying to block the deal at the Daimler supervisory board level, or threaten to strike in the face of the deal. A work stoppage could badly damage Chrysler's already troubled efforts to turn around it sinking U.S. sales.
Cerberus may have the money, but the union holds most of the cards.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
5-13-2007 @ 3:51PM
GUMBO said...
You UAW and the management together had been lying to us shareholders. We know it now. Your management will have no way out of it other than to tell you to take the friggin hike....or if you care to strike, fine, all hell will break loose!!! Civil War? We shareholders will not stand for it!!! We will really be angry at you UAW!!! Really angry!!!
5-13-2007 @ 3:52PM
GUMBO said...
UAW, you see we will not believe what your management will try to tell us. We will only expect your managemnt to get "tough" with you. No other way around it for you UAW. We demand GM and Ford to start making money for shareholders now!! The Germans is giving Chrysler up like a hot potato. UAW is nothing but trouble!!! Real trouble ahead!!! Big time!! Any politican caught licking up UAW's boots will be vaporized instantly!! Pooooof!! UAW , you are all alone!!! Management is already separated from you UAW. Management is hogtied already!!! I am watching to see if you UAW have any clever ideas left up your own sleeves.. I will catch you!!
5-13-2007 @ 6:29PM
FASTHAL said...
THE BEST THING COULD HAPPEN IS TO LET CERBERUS TAKE OVER AND THROW THE UAW OUT THEN THEY WOULD SAVE A BUNCH OF FREE LOADERS FROM MILKING THE COMPANY AND BETTER SERVICE AND PRODUCT WOULD COME OF IT
5-13-2007 @ 9:45PM
frank said...
I guess the great Daimler Company is a damm liar, on how great the German ingenuity is? I thought they were great business people? But they are running out just as one can see that Chrysler is building better greater products than their predecessors. If the Germans walkout on this American company I think the American should boycott German auto products. All they need now is a great care that does 45 miles to a gallon plus and Chrysler will be back on track, but it is easier to walkout on us. So, long Germans. and stay put in Europe if youd walk out. We don't need quitters here in the U. S.
5-14-2007 @ 10:57AM
usrman said...
If Cerberus takes over you are in for trouble. Since they took over part of Albertsons ther is NO respect for the employee. Hours have been cut so bad that there is NO customer service at all. They destroyed our pension plan and our health plan. Just hope they do not take over.
5-14-2007 @ 11:00AM
usrman said...
Get ready for massive layoffs and benefit losses
6-20-2007 @ 10:33PM
GUMBO said...
UAW, cant you see that I am working hard trying to save GM and Ford and er, Chrysler from your UAW misdeeds . I will continue to figure and figure again and again as you change your colors or whatever. I will keep you all bottled up incessantly all through the hot summer days. In the end, I either expect you to demonstrate how GM and Ford will start making money big time or you just walk out the doors. Your pick, buddies... Any other ideas? I am listening skeptically....