Elizabeth Conley / The Detroit News
Josee Valcourt / The Detroit News
On Saturday, United Auto Workers President Ron Gettelfinger and his top Chrysler negotiator flew to Stuttgart, Germany, to meet with DaimlerChrysler AG chief Dieter Zetsche and Chrysler Group CEO Tom LaSorda.
During a four-hour meeting inside DaimlerChrysler's headquarters, Gettelfinger made a "last-ditch effort" to keep Chrysler's nine-year union with Daimler intact. But Zetsche made it "unequivocally clear that that's no longer an option," Gettelfinger said during a radio interview Monday with WJR in Detroit.
That conversation led to one of the biggest surprises in the deal to sell Chrysler: the decision by one of the most powerful labor organizations in the United States to ultimately back the very option it had vocally opposed for months. Suddenly, it seemed, the union was supporting the decision to sell Chrysler to private equity powerhouse Cerberus Capital Management LP for $7.4 billion.
"You have to be able to deal with the card that you're dealt," Gettelfinger said at a Monday afternoon press conference at the UAW's Solidarity House headquarters in Detroit. "And based on everything that we heard, we, without reservation, have made the decision that we would support the decision."
News the UAW would back the deal stumped some union members, particularly since Gettelfinger had so publicly opposed a sale of Chrysler to a private equity firm, whose business philosophy he had described as "strip and flip."
Many have speculated that private investors would be more likely to sell off Chrysler's assets, cut workers and otherwise go for quick profits.
Last month, Cerberus pulled out of an unrelated deal to invest in bankrupt Delphi Corp. because the UAW wouldn't give in to demands for lower wages.
Some union-represented employees had hoped that Chrysler would stay part of Daimler or, in the event of a sale, wouldn't land in the hands of a private equity group.
But it became clear over the weekend that neither fate was viable.
Zetsche, Gettelfinger explained during his radio interview, spent an hour and a half taking the union leader through the process that led to the selection of Cerberus.
"The status quo is no longer there," Gettelfinger said at the press conference, though he declined to reveal details of the weekend conversation.
What seems to have cinched the deal from the UAW's perspective was Zetsche and LaSorda's promise that Chrysler's future under Cerberus looked bright. There would be no plant closings or job losses added to cuts already being made under the automaker's restructuring plan.
Ultimately, "it was the content of what was discussed" at the meeting that resulted in the UAW releasing a statement before sunrise Monday in support of the sale, Gettelfinger said.
"There will be an infusion of cash put into this company -- there's going to be a lot of things that are going to happen that are going to be in the best interest of moving forward," he said.
The union's support of the deal comes as it prepares to hammer out new four-year labor agreements this summer with Chrysler, General Motors Corp. and Ford Motor Co.
Gettelfinger said the union's support of the Cerberus purchase doesn't mean it won't take a tough stand during negotiations.
"We're certainly not going into it saying now that there's a different player at the table and things are going to be changed somehow. That's not our intent. That's not going to happen," he said.
The UAW and Cerberus executives will meet at 11 a.m. today at Chrysler headquarters in Auburn Hills.
"We're looking for a reaffirmation of what we've heard from Dr. Dieter Zetsche as well as Tom LaSorda," Gettelfinger said. "We're looking for a reaffirmation."
Canadian Auto Workers President Buzz Hargrove also will attend today's meeting. In a Monday conference call with the media, Hargrove said the CAW would give Cerberus a shot -- although he was angry that there had been "absolutely no dialogue with the union here."
Today's meeting will be Hargrove's first with Cerberus executives. He said he plans to demand a written guarantee that Chrysler workers in Canada are spared any further layoffs.
On the American side, the UAW's latest response is one of circumstance and not of choice, experts say.
"This may not be the hand that the UAW wanted, but it wants to play the hand in a constructive way," said Harley Shaiken, labor expert at the University of California, Berkeley.
Gerald Meyers, professor of management and organizations at the University of Michigan's Ross School of Business, said he was surprised by the union's move, but approves.
"It was the diplomatic thing to do," said Meyers, the former CEO of American Motors Corp. and a former executive at Chrysler and Ford.
He said union members should not assume the union's support of the sale will lead to givebacks in September's bargaining.
"This is no softie," he said of Gettelfinger. "He's bright, well-educated, articulate and a tough negotiator."