April showers could bring May sale of Chrysler
Last week we told you that DaimlerChrysler's Rüdiger Grube was heading to New York to visit with potential suitors for the Chrysler Group. And it appears he was a man on a mission. It seems that a close source has told news outlets that a sale could be wrapped up by as early as May. Although talks are ongoing and nothing is definite, it looks like at least one of the bidders has met the company's expectations in principle. Those bidders included Blackstone Group, Centerbridge Capital Partners LP and Cerberus Capital Management LP, as well as Canadian auto-parts supplier Magna International Inc. and private-equity firm Ripplewood Holdings Inc. After initial meetings, the final three appeared to be Cerberus, Blackstone and Magna.Deals like this don't happen overnight, however, so even if a bidder has been chosen, it will take some time to dot the i's and cross the t's. And one slightly sticky point may remain. Workers' reps on the Chrysler supervisory board have reportedly been okay with a sale "as long as the buyer agrees to protect as many jobs as possible." That's a bit different than what UAW head, Ron Gettelfinger, said a couple of days ago. His words were a bit less supportive. Something closer to sale or no sale, UAW jobs were the most important thing. He also suggested he had the support of the supervisory board, of which he is a member. Equity partnership possibilities are also a potential stumbling block still. Since Kirk Kerkorian first brought that issue into the spotlight, other bidders have incorporated it into their proposals.
But billionaire Kerkorian's $4.5 billion bid is apparently still getting snubbed as well. Gettelfinger, who said he has met the bidders, said the UAW would reject any bid from so-called "strip-and-flip" investors. That seemed a thinly veiled slap at interested leveraged-buyout firms. The primary concern for the union is preserving jobs, which also explains why GM didn't ever have a real chance, according to sources. Of course, with a $1.5 billion loss last year, Chrysler still plans to cut 13,000 jobs in hopes of returning to profitability by 2008.
[Source: Automotive News, sub req]
Reader Comments (Page 1 of 1)
Steve Shickles 7:56AM (4/21/2007)
Something needs to happen.
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Rene Curry 8:01AM (4/21/2007)
Here is what the UAW should propose....There mission statement should change to get as much pay & benefits as possible for their employees while creating the highest skills, productivity, innovation, & quality work force possible. Change all the rules!
The Chrysler buyer (hopefully private) in turn should set a fixed portion of the profits for all workers while having a pay freeze until the company is profitable. Future pay increases could be limited while the profit sharing portion could be open ended based on company performance. Enough percentage that it could impact their pay substantially, paid quarterly.
Then the workers would have incentive to change work rules, increase productivity, contribute ideas, and promote quality as it would directly effect their pay.
It could change the whole union - corporate relationship and model. Even upper management should be on the same system. With inflation the fixed costs would actually decline rather than increase. This would help during the rough times.
This is not a new idea, but one that companies don't like to implement except on a very limited basis. Corporate greed? Yes Shareholders short-sighted Yes.
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J B 10:58AM (4/21/2007)
i dont blame them for not wanting Kerkorian's bid, he has a real creepy vibe about him, oh wait, its cuz he is a creep! i doubt that the uaw will give that much in terms of leeway for chrysler, leeches never care how the host is doing anyway right?
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L3 11:37AM (4/21/2007)
So how does Kirk formulate a 15-year plan? He's 89.
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Dave T 11:57AM (4/21/2007)
When he says "protect as many jobs as possible" what he really means is protect the Union's revenue stream.
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Afi K. James 12:12PM (4/21/2007)
They need to bring out the Chrysler Imperial to save that company.
Make it like the concept.
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DAVID 12:31PM (4/21/2007)
That Chrysler Imperial was a POS. Does the Union seriously think they can run a Auto Major Corp? If that Happens it will definatly be the end of Chrysler. Damiler Should just keep them and revamp the whole thing.
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bumba 1:12PM (4/21/2007)
Magna is partnering with Onex Corp!!!
Not Ripplewood!!!
Autoblog, get your facts straight.
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Brad 1:39PM (4/21/2007)
#7 I totally agree, the Imperial was just awful. They have made some mistakes in the past by not going with some concepts, MD80, Copperhead, and the original Charger come to mind. Whoever the new owner is they are going to have a huge task in front of them, getting rid of the MB mind set of sacrificing quality for costs.
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Afi K. James 9:56AM (4/22/2007)
Actually I'm the only one that likes the Imperial, it could put chrysler back into dominance.
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Brad 10:20AM (4/22/2007)
I don't think Chrysler needs a 60K sedan. They need vehicles that are going to sell in volume.
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Nick 5:48PM (4/22/2007)
Chrystler needs to make a small, cheap, RWD car, in the vein of the 240SX, RX-7, etc.
I think those would sell like hot cakes.
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