Call it a roadblock, or just an attempt to build a toll. The head of the UAW, who sits on the DaimlerChrysler (DCX) supervisory board, wants the company to cease and desist in its attempt to sell its Chrysler unit.
Empty. His call for the company to stop the sale sounds empty. But, as Reuters pointed out: "The comments on Chrysler’s future were the strongest yet from the UAW, which analysts see as having the potential to complicate or stall the sale process as contract talks with Chrysler and other Detroit automakers begin this summer."
In other words, the UAW plans to try to make it impossible for Daimler to sell its US unit. Chrysler is already trying to get the big union to agree to lower some benefits for hourly workers. The UAW has said "no".
The UAW game of chicken could work. The union could agree to sacrifice some jobs if Daimler keeps Chrysler, but say that it will stike the automaker if the US unit is sold. The gamble may not be so stupid. The UAW is concerned that a private equity buyer would attempt to break the company into pieces and eliminate a huge number of employees.
The UAW is working the calculus of how its can lose the least. It knows it cannot win, but a modest defeat is better than a rout.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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