UAW Group, Tracinda Discuss Bids for Chrysler: WSJ
Representatives of billionaire investor Kirk Kerkorian, met with United Auto Workers members Sunday, the Wall Street Journal reports.
The meeting comes in the wake of a $4.5-billion offer for the Chrysler unit of DaimlerChrysler, from Kerkorian's investment company, Tracinda Corp.
The meeting in Toledo, Ohio, was with a group of Chrysler workers that had formed an "employee buyout committee". The group had sent a formal proposal offering to take a 70% stake in the automaker over a period of five years or more on behalf of its roughly 50,000 U.S. factory workers. No firm conclusions, but it represents a fresh twist in the intensifying contest for America's fourth-largest auto maker, a unit of the German industrial giant since 1999. It
also underscored the influential position the UAW holds with potential bidders.
The Wall Street Journal says that DaimlerChrysler's top leaders, including Chief Executive Dieter Zetsche, will meet tomorrow with labor groups, who plan to ask about the company's strategic review of Chrysler and the status of DaimlerChrysler's talks with three other groups. A person familiar with the matter said Mr. Zetsche won't say more than what he has already stated publicly.
Michele Mauder, who works at Chrysler's Toledo plant that makes its popular Jeep Wrangler, said the employee buyout group she represents had asked DaimlerChrysler for an "emergency grace period" of 45 days to consider its offer.
Mauder said, although her group has said it supports the bid of Canadian auto parts maker Magna International over competing private equity firms. "We need to keep all doors open at this point," she said.
For his part, UAW President Ron Gettelfinger told a Detroit radio station on Friday the union was reviewing the employee buyout proposal but that his priority was to persuade Chrysler's German parent Daimler to keep the automaker.
Union War Room
"We've had a war room established where we're focused on all the different alternatives at Chrysler," Gettelfinger told radio station WJR.
Gettelfinger declined to rule out the possibility that the UAW could take an equity stake in Chrysler.
But Canadian Auto Workers President Buzz Hargrove said he was not interested in an employee stock ownership plan.
"The workers already have everything invested in that company today including their jobs and their pensions," Hargrove told trade publication Automotive News.
Analysts expect Chrysler's unions, led by the UAW, to be central to any final deliberations needed to clinch a deal for the sale of Chrysler by its German parent, DaimlerChrysler.
In one sign of the UAW's influence in the auto sector, private equity firm Cerberus Capital Management indicated this week that it would withdraw from a $3.4 billion investment to support Delphi's emergence from bankruptcy after failing to close a deal on labor costs with the union.
Daimler strategy chief Ruediger Grube has been in New York for talks with a number of bidders for Chrysler. One person familiar with the situation has said preliminary talks could be completed as soon as May.
Bidders for Chrysler include private-equity firms Cerberus Capital Management and Blackstone Group as well as Magna, according to people familiar with the bids.
Kerkorian's $4.5-billion bid is the only offer that has been made public, although it has been considered too low to be competitive by many analysts.
DaimlerChrysler Chief Executive Dieter Zetsche said in February all options were open for Chrysler, which lost nearly $1.5 billion in 2006 as buyers shifted away from the light trucks and sport utility vehicles that generated two-thirds of its total sales.
Chrysler plans to cut 13,000 jobs as it seeks to return to profitability by 2008.