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Chrysler workers making long shot bid to buy automaker
The Detroit News is reporting that a group of 25 Chrysler employees in Toledo have formed a group called the "Employee Buyout Committee" and are actively exploring the necessary steps required to see the fate of Chrysler end up in the hands of its employees. Their proposal would give Chrysler employees a 70% stake in the automaker, with DaimlerChrysler retaining the remaining 30%. The group appears to be making all the right moves so far, having submitted its proposal first to the UAW, whose legal department is now evaluating the proposition. The employee buyout plan was also mentioned at DaimlerChrysler's annual shareholder meeting in Berlin on April, 4. The committee's apparent spokesperson, Michele Mauder, has also sent the proposal to Chrysler Gropu CEO and DaimlerChrysler CEO Deiter Zetsch, humbly requesting the employee's bid at least be given equal consideration with bids from private equity firms like Cerberus Capital Management and Blackstone Group, as well as Canadian parts supplier Magna. A Chrysler spokesperson has also commented that the proposal is expected to be reviewed by the automaker's legal department.
If allowing Chrysler's own 50,000 UAW employees to own the automaker doesn't happen, the UAW has expressed that it would much rather thow its hat in the ring with Canadian parts supplier Magna than any of the private equity firms that have offers on the table. While the employee buyout plan is a long shot, and if successful, an incredible risk for the employees, it's also inspiring that a group of workers would be the masters of their own fate. Unfortunately, it's not yet known how much the employees could offer for a 70% stake in their employer, which, in the end, is likely DaimlerChrysler's number one consideration in this sale.
[Source: The Detroit News]
Reader Comments (Page 1 of 1)
Lithous 2:53PM (4/20/2007)
If this worked out, they wouldn't need the UAW, right? If the employees had controlling interest then they don't need a middle man. Sounds like a long shot. Harley was probably less wanted by others and less money to buy (wasn't that an employee buyout?) so I don't think the story will end so nicely here (not to mention the competition in Harley's realm was not what it is in the general car business).
Too bad, it would be nice to see Chrysler go back to U.S. ownership but looks like it might not.
I still want all the American import fanboys to put their money where their mouths are and buy out Chrysler and show GM and Ford how it is done. Nader, Neil, Farrago and the rest could sit on the board.
BUT THEY ARE ALL TALK AND NO GAME. PERIOD. END OF STORY. I'M SURE YOU ARE ALL EXPERTS ENOUGH FOR KERKORIAN TO PAY 30% AND HELP YOU GUYS GET THE REST. ALL TALK. ALL TALK. ALL TALK. IN THE INDUSTRY FOR HOW MANY YEARS AND DON'T HAVE ENOUGH PULL TO GET IT DONE, DO YOU? HMMM, BUT YOU GUYS ARE THE ONES WHO DO EVERYTHING RIGHT (AND DON'T LIVE IN GLASS HOUSES) SURELY YOU ARE ALL WORTH THE BILLIONS (AT LEAST COMBINED) TO PULL IT OFF. COME ON PERFECT PEOPLE (YES, YOU AMERICAN IMPORT FANBOY AND FANGIRLS).
I thought so.
LMAO.
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The Other Bob 2:54PM (4/20/2007)
The future pension and medical costs of Chrysler groups are greater than the expected cash value of the company. Therefore, the employees could forego a portion of the costs as cash to purchase the company. It actually gives them a lot of value toward buying it if the emplyees see value in ownership.
If the employees were each given stock as a trade, it could work out because the stock would rise in value once the future pension costs are reduced. Money put into those pensions on a yearly basis to fund them could then be put into product.
The employees may having nothing to lose because if the company goes bankrupt they lose most of their pensions anyway.
It's not that crazy.
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papercliprebel 3:50PM (4/20/2007)
the irony in that is that the uaw will have to choke on its own sword in concessions to keep the the company running. oh sweet sweet irony.
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ssgtakeo 9:56PM (4/20/2007)
I think this is a good idea, as long as the decision making isn't boiled down to consensus for everything. I think Chrysler as an employee-owned company might be very good, other employee owned business do quite well (i.e. Southwest Air)
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David 6:15PM (4/20/2007)
"The committee's apparent spokesperson, Michele Mauder, has also sent the proposal to Chrysler Gropu CEO and DaimlerChrysler CEO Deiter Zetsch"
I think you meant Chrysler Group CEO *Tom LaSorda* and DaimlerChrysler CEO Dieter *Zetsche*.
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Curt 7:14AM (4/21/2007)
If Chrysler employees buy the company, I will be buying a Dodge Caliber.
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akns 9:10PM (4/20/2007)
#1 Lithous: Why would import fans want to buy Chrysler? They already have Toyota, which makes more profit than the entire big 3 combined...
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Lithous 11:03PM (4/20/2007)
"#1 Lithous: Why would import fans want to buy Chrysler? They already have Toyota, which makes more profit than the entire big 3 combined..."
American import fanboys own Toyota? Wow, I didn't know that.
I guess you don't get it on so many levels. That is why it is more of a joke than reality what I propose.
1. It is 5000 times easier to win awards for writing, Dan Neil, than it is to run a car company. If it wasn't, and you are so into cars, your name would pop up as someone who wants to get in on the ownership NO MATTER WHAT IT TAKES. But you won't even try BECAUSE YOU WILL FAIL.
2. Old school America would call out such puntas (like Neil, Farrago and the rest) for being all talk and no action. Modern America just accepts it. Farrago and Frank (Farrago's companion) couldn't run a car company like Chrysler if Gates, Buffet and every Japanese exec. gave them free advice for a year. They are destructive and they take the easy way out whenever possible. If you don't believe me, look at the low class and utterly stupid merchandise for sale at TheLiesAboutCars. Cooter from Dukes of Hazard would be embarrased to wear a hat with a toy license plate on the front. My god, that is sick to think they thought that whole license plate merchandise is worthy of any sales.
3. If you think that allowing Japanese companies to put Trojan Horse factories in America at a time when they make 50% of their world PROFITS from U.S. sales is great for America in the long term while they add 2000 jobs Ford takes away 10000 (not because things are booming and they are incredible dicks)
Gee, for some reason people do look at GM's revenues and call it a victory every year, no, they look at profit. Why? Simple. It is the smart way to figure out a company's strength. Yet, we keep hearing that the Japanese are creating jobs here. I.E. stop looking at what is "added" but the net number of automotive jobs since the Japanese came over here.
I will never post on another automotive site if Farrago, Neil and Nader put together a package and bought Chrysler and made more profit than Toyota in 10 years.
One has to think these guys love cars or are concerned about them very much for one reason or another. Here is their chance. It doesn't come along very often (the last sale of Chrysler was not at nearly the bargain price this time is going to show).
PLEASE PUT UP OR SHUT UP.
#5 doesn't understand or doesn't want to, the things I am writing about. Most of you understand exactly what I am talking about. I am tired of the Terrel Owens crapola displayed by Americans in the car industry. Here is your chance to show everyone how right you import fanboys are, buy Chrysler and show us.
You would do better replacing Bret Favre in his job than successfully running GM, Ford or Chrysler. And you would do the prior job poorly too, don't get me wrong.
#5 is delusional. He thinks because he can buy a Toyota that *he* accomplished something in the auto industry. He doesn't get it at all.
No. Bad mouthing the U.S. domestic car companies and having a (theoretically) real chance (at bargain price) to own a car company and prove how you really knew the right way to do it is not the same as going down the street and buying a Toyota (or German car like the LiesAboutCars guys like to do) to show Detroit how it is done. No, not the same thing. Sorry.
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Lithous 11:13PM (4/20/2007)
I mean to write: for some reason people don't look at GM's revenues and call it a victory every year.
Of course that is not how it works (revenue is not the most important thing), NET profits are a better indicator and so, NET jobs each year is the better way to look at it too. But we don't want to do that. Because it clearly shows what most don't want to know.
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akns 11:56PM (4/20/2007)
Lithious,
I think you've gotten yourself a little too riled up there.
Most import fans aren't saying that they can take over Ford, GM, or Chrysler and fix all of their problems. They know that the UAW is a huge problem, and so they certainly don't claim to be able to step in and just get rid of the UAW. The UAW is just too entrenched.
Import fans are simply saying that Toyota makes better cars than the big three. Whether or not that's true is debatable, but it has nothing to do with personally fixing up the big 3.
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John C Keenan 2:58PM (5/03/2007)
Great discussion about the UAW. I thought this sirte would be useful www knowyourpension org. They offer information on the topic.
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