Cerberus, the suitor that appears to have wrapped up the purchase of Chrysler from DaimlerChrysler (DCX) does not exactly have a perfect record of closing deals. The fund walked away from its arrangement to buy bankrupt car parts company Delphi. The rumor at the time was that trouble with the UAW caused Cerberus to get cold feet.
Some members of the UAW believe that the union was not aggressive enough in getting guarantees about jobs and benefits before the Chrysler deal was inked. And, eventually, that could open the door to trouble with the buy-out of the big US car company. A spokesperson for the Chrysler Employee Buyout Committee, a group of UAW workers told The Detroit Free Press: "Chrysler’s management and union employees have been betrayed by the UAW and denied the right to bid fairly for Chrysler by DaimlerChrysler." The group was considering having the union play a part in taking the company private.
As MarketWatch points out the fragmented opinion within the union "comes at a vulnerable time for Gettelfinger’s (UAW president) management team, which is preparing to negotiate new labor contracts with Detroit’s Big Three auto makers this summer." In other words, the head of the UAW may not end up with member support.
The Chrysler deal may look done, but that is on the surface. If Chrysler’s hourly workers want to preserve their stake in the game, they could making closing the transaction very difficult.
Douglas A. McIntyre, a former resident of Pontiac, Michigan, can be reached at [email protected]. He does not own securities in companies that he writes about.
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