Canadian Auto Workers to Take on Kerkorian over Chrysler Bid
The head of the Canadian Auto Workers says he will try to thwart billionaire investor Kirk Kerkorian's bid for Chrysler, fearing Kerkorian will cost thousands of workers their jobs.
CAW President Buzz Hargrove said that Kerkorian's Tracinda, as well as private equity investors who are studying Chrysler, have a history of hurting workers.
"We don't have much confidence or trust in Mr. Kerkorian," Hargrove said in a telephone interview with The Associated Press. "He's made billions by coming in, buying low, cutting jobs and throwing people out of work, then selling," Hargrove said.
The CAW represents about 11,000 Chrysler workers in Canada. Its contract with the U.S.-based wing of DaimlerChrysler doesn't expire until September 2008, a year later than its U.S. counterpart, the United Auto Workers.
A UAW spokesman declined comment on Kerkorian.
Hargrove said the CAW is most interested in suitors who would keep Chrysler intact and honor the terms of its contract. He also said he has had no contact with Kerkorian's group, nor would he want any.
"No, not interested," Hargrove said when asked if he would entertain talks with Kerkorian.
Chrysler has three Canadian plants that make its staple minivans as well as the Chrysler 300 sedan and Pacifica crossover vehicle as well as the Dodge Charger sedan and Magnum station wagon.
On Thursday, Tracinda announced in letters to DaimlerChrysler that it was prepared to make a $4.5 billion cash offer for Chrysler and would take the company private. Tracinda adviser and former Chrysler executive Jerome York said it would offer the UAW substantial equity in Chrysler in order to solve the company's rising health care and unfunded pension costs.
Taking the company private, York said in a letter to DaimlerChrysler Chief Executive Dieter Zetsche, would be a long-term approach to solving Chrysler's problems without having to worry about earnings per share results "for the initial five, six or seven year period it will likely take to build Chrysler into a robust and lasting, stand-alone entity."
The letters didn't mention offering an equity stake to the CAW, but Hargrove said the union is not interested in that.
"We see absolutely no advantage to that whatsoever," he said.
A message was left Tuesday for a Tracinda spokeswoman in New York.
The company's letter said long-term, patient investing has been its approach, citing its decade-plus of investment in Chrysler, its eight years as controlling shareholder of Metro-Goldwyn-Mayer and 20 years as controlling shareholder in MGM Mirage .
Last week's offer from Tracinda, which tried to buy Chrysler in 1995 and lost out when the company merged with Daimler-Benz three years later, came a day after a DaimlerChrysler shareholders' meeting in Berlin marked by simmering tension over the automaker's future.
Tracinda on Friday said in a statement that because of the "brutal" economics of the North American auto market, the only realistic plan for Chrysler moving forward was one in which all parties had an equal stake.
The Kerkorian bid is slightly lower than at least one competing offer from Canadian auto parts supplier Magna International Inc., worth a reported $4.7 billion. Two private equity groups also have expressed interest in the Auburn Hills-based Chrysler Group.
Cerberus Capital Management and a consortium of investors led by Blackstone Group each have reviewed Chrysler's finances and were expected to make bids.