In one of the strangest statements of the year, the head of the UAW Ron Gettelfinger said that he was not willing to give up on Chrysler as a part of the DaimlerChrysler AG (NYSE:DCX) corporation. According to Reuters: "I've been around the process long enough to know that I'm not ready to concede that the Chrysler Group is going to come out of DaimlerChrysler."

The last anyone checked, the UAW owned no shares in Daimler and had no other blocking rights to the sale. Gettelfinger went on to say that, if Chrysler is sold, he hopes that it is to another car company.

Since a private equity firm has no ability to take out costs through cutting overlapping management, product development, and public company overhead, the only way to improve margins is through reductions in labor expenses. With Chrysler as part of a larger parent, the UAW can look to the Daimler balance sheet as a source of keeping union benefits and pensions funded. With a private equity firm as the owner, whatever assets and liabilities go with the sales are all the all the UAW can look to as the foundation of a favorable contract.

Most private equity firms like to go to the debt markets for the majority of the capital used in a buy-out. It is entirely possible that a purchase of Chrysler could put billions of dollars in debt onto it balance sheet. Not much for the UAW to chase there.

Douglas A. McIntyre is a partner at 24/7 Wall St.