Ripple Effect of Chrysler Sale In Louisville

Ripple Effect of Chrysler Sale In Louisville http://www.whas11.com/topstories/stories/051407whasmjdTopChryslerLocalFord.6bd74dcc.html
LOUISVILLE, Ky. -- Daimler-Chrysler has agreed to sell controlling
interest of its Chrysler division for $7.4 billion. Private equity firm Cerberus will control 80 percent.
Just last week UAW workers at the Kentucky Truck Plant approved concessions to Ford. If Chrysler cuts even more jobs and wages, that could put the UAW in an even weaker position as negotiates the next national contract.
“We got enough to worry about. We just got to worry about Ford right now,” says Ford worker Bill Mullens. “We can't worry about Chrysler.”
But Ford workers operate under the same national UAW contract as Chrysler and GM workers. With that national contract about to expire, tough negotiations from Chrysler’s new owner could cost all autoworkers, including local Ford workers.
And that's not including what they've already given up in concessions at both of Louisville’s Ford plants.
“I think we're going to have to. That's all there is to it,” says Ford worker Pat Stephens.
“I think we're getting sold out any doggone way. Taking that COA, collective operating agreement, you lose overtime, you lose... You just lose!” says Ford worker Mike Jones.
As automakers cut costs, autoworkers -- especially new autoworkers -- will pay the price.
“The union is agreeing to what they call two-tier wages,” says John McElroy of Autoline Detroit. “So, when somebody hires in new, they come in at a substantially lower wage rate. And, it takes them a number of years to build up to where everybody else is.”
And McElroy tells me by phone that the biggest issue is a pension system and health care costs that are growing at a double-digit rate.
“I don't think any car company can afford that. And that is definitely going to be pressure that is going to be put on the Ford worker,” he says.
Ford workers who have given till it hurts.
“What else are we going to give up?” asks Jones. “Living?”
Formal negotiations on a new national contract are set to begin in July. The contract expires in September.
The UAW’s endorsement of the Chrysler deal is a big shift from earlier this year. Union President Ron Gettelfinger had warned that a private equity buyer would “strip and flip” Chrysler, by selling it off in pieces.
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Jim Higgins wrote:

http://www.whas11.com/topstories/stories/051407whasmjdTopChryslerLocalFord.6bd74dcc.html

DiamlerChrysler is selling Chrysler? Paying to get rid of it is closer to the truth.
All but $1.35 billion of the $7.4 billion that Cerebeus will go to Chrysler operations. Diamler Chrysler will absorb $1.6 billion in restructuring costs. Seems DiamlerChrysler will be $250 million the red. But, DiamlerChysler will also lend Chrysler $400 million. I guess there are some rounding errors because the total outflow will be $678 million.
Ouch!
It cost DiamlerChysler $36 billion in 1998 to buy Chrysler (a merger of equals). Now, it is going to cost them an addition $678 million to get rid of most of Chrysler (19.9% of Chrysler will still be owned by DiamlerChrysler).
Don't hire Dieter Zetsche as your financial advisor WBMA.
Jeff
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Next thing we know the UAW workers will only be making as much as the workers in the Toyota and Honda assembly plants and receiving the same meager benefits and the loosing their defined retirement plan to a 401K, like the Toyota and Honda workers. How sad for them. ;)
mike

http://www.whas11.com/topstories/stories/051407whasmjdTopChryslerLocalFord.6bd74dcc.html
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Mike Hunter wrote:

At least they would have a job. Would you rather have 85% of something Mikey, or 100% of nothing? The benefits are not trivial at Toyota and Honda.
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