Vol. 71/No. 23      June 11, 2007

UAW president Ronald Gettelfinger backed the sale in a May 14 statement, saying it “is in the best interests of our membership, the Chrysler Group and Daimler.” A month earlier Gettelfinger vowed the union would fight the sale because a private investor would “strip and flip” the company, selling its most valuable parts for a quick profit. The sale of Chrysler to the private equity investment outfit Cerberus Capital Management sets the stage for a new round of assaults on autoworkers. It also comes as the UAW prepares to enter contract negotiations this summer with the Big Three—Chrysler, General Motors, and Ford.

In February the merged company, DaimlerChrysler, announced it would cut 13,000 jobs and close all or part of four plants in its second restructuring. The same SUVs and trucks that generated huge profits for Chrysler in the 1990s became the source of equally large losses as gas prices surged in recent years. Last year 100,000 Chrysler vehicles piled up in storage lots, a big source of the company’s $1.5 billion loss in 2006.

Cerberus, which paid $7.4 billion for an 80 percent controlling stake in Chrysler, specializes in profiting from investments in troubled companies through rigorous cost-cutting and operational controls.

Last year Cerberus bought a majority share in General Motor’s financing arm and emerged at the head of an investment group to bring Delphi corporation out of bankruptcy. GM created Delphi as a separate company in 1999 from its former parts department. Cerberus announced it was pulling out of the Delphi deal after it could not reach agreement with the UAW on reduced wages and benefits.

Rationalizing his change of mind on the Chrysler sale at a May 14 press conference, Gettelfinger said the union had no choice because Cerberus was the only company discussed during a four-hour meeting with company executives in Stuttgart, Germany. “The decision was made before we ever got there,” he said.

Cerberus chairman John Snow, former treasury secretary in the Bush administration, expressed his appreciation for Gettelfinger’s support saying, “Cerberus has a good record of working with companies that are organized. We respect the role of organized labor. We appreciate the support the UAW has given.”

Anthony Watson, an assembler at the Chrysler truck plant in Warren, Michigan, didn’t see it that way. “It makes me real nervous,” he told the New York Times.  
 
 
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