Unions representing auto workers at Chrysler have gathered in Berlin ahead of the DaimlerChrysler (DCX) annual meeting. They want two things. The first is a look into the process of the potential sale of Chrysler, The other is to make sure the sale would not mean job cuts.
The unions fear that a private equity buyer might cut jobs and break Chrysler into pieces to make a profit on the buy-out.
What the unions fail to say is that there will be job cuts at Chrysler whether its finds a buyer or not. Like GM (GM) and Ford (F), the Daimler unit in the US cannot make money if it remains loaded down with too many union workers, their benefits and pensions. The UAW has already agreed to employee cuts at the other two US automakers. While the unions may think that because Chrysler has a parent with a strong balance sheet that it can afford to loss money in North America, it is kidding itself. With labor negotiations beginning in September, Daimler will want the same kind of deal that Ford and GM are getting.
Chrysler is going to chop jobs. It may take a strike, but it will not matter who the owner is.
Douglas A. McIntyre
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