Reuters reports that The Times has found out from sources inside GM (GM) that it will not bid for Daimler unit (DCX) Chrysler. It is concerned that it cannot take on the excess capacity. That would leave Canadian parts company Magna and some private equity firms.
But, the UAW may make a deal for Chrysler almost impossible. It is promising that it will not give up more jobs or benefits, even if it means a strike. Buyers looking at Chrysler have to get a bit nervous about talk of the auto company being shut down for any length of time. Even if they plan to break the company into pieces, it will not be as attractive a move if the UAW plans to be aggressive in keeping labor costs high.
The union members of Daimler’s board have already said they would resist a move to sell the Chrysler unit. It would appear that their brethren in the US plan to put on pressure of their own.
A rock and a hard place.
Douglas A. McIntyre
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