UAW weighs Chrysler bid
The United Auto Workers is reviewing a long shot proposal from a group of Chrysler workers in Toledo who are pushing for employee ownership of the struggling automaker.
About 25 hourly workers calling themselves the "Employee Buyout Committee" are proposing that workers take a 70 percent stake in Chrysler with DaimlerChrysler retaining the remaining stake.
Michele Mauder, who works at Chrysler's Toledo Supplier Park, where the Jeep Wrangler is built, and is a member of the committee, said the workers believe employee ownership is the best option for Chrysler's 50,000 UAW workers.
"The bottom line is the corporation won't take the hit, it's the employees, the shareholders and the consumers," she said in an interview. "So we need to work as a team."
The employee buyout committee was notified by the UAW last month that its proposal is being evaluated by the union's legal department, Mauder said.
The proposal was mentioned by a shareholder at DaimlerChrysler's annual meeting April 4, and on Tuesday, Mauder received written notification from DaimlerChrysler that the proposal is being reviewed by the German automaker.
UAW spokesman Roger Kerson could not be reached for comment late Thursday.
Chrysler spokesman Mike Aberlich said the proposal from the employee group was sent to Chrysler CEO Tom LaSorda and is "expected to be reviewed by the company's legal department."
Mauder anticipates the proposal will be discussed at a DaimlerChrysler supervisory board meeting next week. While she realizes the proposal may be a long shot, she feels it's worth a try.
"Unless they come up with a better plan, this is it," said Mauder, who noted that Chrysler workers owned shares in the company in the 1980s after Chrysler turned to the federal government for loans to bail it out of a financial crisis. "It's really in Daimler's ball court now."
Employee ownership has been tried in other struggling industries, including steel and airlines, but not widely in the auto industry.
"The issue here is employee ownership is both a long shot and a slippery slope," said Harley Shaiken, a labor expert at the University of California, Berkeley. "So much depends on the details and the structure of the reorganized company."
Mauder pleads the employees' case in an April 9 letter to DaimlerChrysler CEO Dieter Zetsche that was attached to their proposal.
"It appears the sale of Chrysler may not only affect our employees and retirees, but essentially could affect the entire automobile industry depending on who acquires our company," she wrote. "One never knows until one asks. By no means do we want to interfere with any potential sale of Chrysler. Mr. Zetsche, you have made the statement that all options are on the table. Our committee would hope that this option would be held in comparison to the other possible offers"
Although the workers would prefer Chrysler remain with its parent company, the letter says, "If DaimlerChrysler is adamant to sell and (Canadian auto supplier) Magna (International Inc.) would be the leading contender, our committee would prefer the option of partnership with them versus a private equity firm.
"Magna, the Canadian operations, had an established employee equity and profit participation program."
DaimlerChrysler is in negotiations with several potential Chrysler buyers, including two of the country's largest private equity firms, Cerberus Capital Management LP and Blackstone Group, which is working with Centerbridge Capital Partners. Also in the running is Magna, which has partnered with Onex Corp., a Canadian buyout firm.
In addition, billionaire investor Kirk Kerkorian, through his Tracinda Corp., earlier this month submitted a $4.5 billion bid for Chrysler that included an ownership stake in the company for the union.
Earlier this week, LaSorda declined to reveal details of the ongoing negotiations. "I'll just say this," he said. "Discussions continue."
The offer from Kerkorian, who tried to take over Chrysler in 1995, includes an equity stake for the UAW as well as for Chrysler management.
UAW President Ron Gettelfinger has said the private equity bidders for Chrysler also have talked to the union about giving workers a stake in the automaker.
But Gettelfinger has repeatedly said he would like DaimlerChrysler to keep Chrysler and pledged to use his seat on the 20-member DaimlerChrysler supervisory board to oppose any deal that takes Chrysler private. The supervisory board meets next week in Germany. Other labor representatives on DaimlerChrysler's board have said they wouldn't support a bidder that would break up the company.
Mauder said she has researched employee stock ownership and is working with a team of experts on the subject from Kent State University. The group hopes local unions will support their cause and has reached out to local UAW leaders in Detroit.
Members of the employee committee will attend the 21st Annual Ohio Employee Ownership Conference today to learn more about such a business venture.
They also plan to launch a Web site where workers can correspond with each other about the idea of perhaps one day becoming owners of Chrysler.
Workers' concern over a private equity buying the company is "quite justified," labor expert Shaiken said.
"Essentially what they seem to be saying is they want to see a successful manufacturing company. The feeling of wanting Chrysler as a successful ongoing concern runs through the minds of almost all Chrysler workers and the paradox is you've got a lot of talent and experience in these factories."