Friday, May 18, 2007

Chrysler sale critics speak out


"Daimler screwed Chrysler royally," former Chrysler Chairman Lee Iacocca writes in BusinessWeek.

    DaimlerChrysler CEO Dieter Zetsche, above, and UAW President Ron Gettelfinger came under fire.

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  • DaimlerChrysler CEO Dieter Zetsche and UAW President Ron Gettelfinger, above, came under fire.

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Iacocca blasts DCX; worker group upset

Dissident voices -- of current workers and a former chairman -- are rising over DaimlerChrysler AG and the deal to split it back in two.

UAW members who wanted to take Chrysler private as an employee-owned company lashed out Thursday at their union's leadership for not aiding their efforts.

"Chrysler's management and union employees have been betrayed by the UAW and denied the right to bid fairly for Chrysler by DaimlerChrysler," Michele Mauder, an hourly worker at the Toledo Jeep plant, said in a statement. UAW President Ron "Gettelfinger refused and continues to refuse to assist, support or stand up for all the employees, who don't want to be pawns in the private equity world. We want to buy the company and we can do it."

Former Chrysler Corp. Chairman Lee Iacocca weighed in Thursday on the proposed deal by DaimlerChrysler to sell Chrysler to private equity giant Cerberus Capital Management. Cerberus is spending $7.4 billion to acquire an 80.1% stake of the Auburn Hills-based automaker, though most of that money will go into Chrysler.

"Daimler screwed Chrysler royally," Iacocca wrote in an essay for BusinessWeek. When the companies merged in 1998, "Chrysler was the lowest-cost producer and the most profitable car company in the world, with sales of 2.5 million cars and light trucks. But it took Daimler less than a decade to drive Chrysler off a cliff."

DaimlerChrysler Chief Executive Dieter Zetsche and Chrysler CEO Tom LaSorda have both said the deal with Cerberus is the best option for both sides of the company.

Gettelfinger, who stresses that the union was not involved in picking a buyer, has said it is the best option for the workers.

"Certainly the announcement on Monday that Cerberus will be the new owner of Chrysler is a concern to all UAW members who work at Chrysler plants. As most of you are aware, our union fought hard to keep Chrysler within DaimlerChrysler," Gettelfinger said in an online forum Wednesday. "Unfortunately, the company decided that was not an option."

A UAW spokesman declined to comment Thursday.

Iacocca weighed in on Gettelfinger's blessing of the Chrysler-Cerberus deal.

"With new contract negotiations set to begin this summer, many workers fear they'll be forced to make huge concessions," Iacocca wrote. "But that fear existed before the sale. If Cerberus is serious about reviving Chrysler, it will have to take care of the employees who build the cars and the dealers who sell and service them."

Mauder and her group, called Chrysler Employee Buyout Committee, emerged on the public scene April 4 when an ally in Germany read a letter during the DaimlerChrysler AG shareholder meeting in Berlin urging an employee buyout.

The group's idea was reviewed by the union and DaimlerChrysler but never went anywhere.

Gettelfinger had said the union was considering all options but also referred to the group's idea as "sketchy."

The employee group complained that its efforts were not taken seriously by DaimlerChrysler.

"It is one thing to be outbid for a company, but it's quite another thing not to be allowed to bid at all," Richard Caires, a Connecticut investor who signed on as a consultant for the group, said.

On Monday, Zetsche was asked about the employees' idea. "There was no substance at any point in time," Zetsche said of the group's efforts.

Kevin Tynan, an analyst with Argus Research, predicted Thursday that new owner Cerberus will likely do one of three things: "Keep Chrysler and use its automotive restructuring expertise to drive the company to recovery, something Chrysler couldn't do; win some modest concessions with the union through the new UAW contract and flip the whole package to another chump; or carve up the pieces ... and sell off the assets one by one."

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