Chrysler workers uncertain about deal with Cerberus
(Published Tuesday, May 15, 2007 10:23:12 AM CST)
A d v e r t i s e m e n t
By Emily Fredrix Associated Press
KENOSHA, Wis. - Chrysler workers weren't sure what to make of a buyout of the automaker by private equity firm Cerberus Capital Management LP announced Monday.
It could mean more job losses and concessions in the next round of contract talks this summer, if the firm is coming in just to make a quick buck. But it also could get the troubled motor icon back to profitability.
Workers on the first shift at the Kenosha Engine Plant had more questions than answers on Monday, said Glenn Stark, a 43-year-old supervisor of maintenance systems. Stark, who has been with Chrysler since 1983, said he hopes operations under the new owners might return the money-losing operation to something more stable. But questions loom - as they have for months - about spinning off divisions, funding pensions, and trimming payrolls.
"For most people, it can't get much worse than what it is right now," he said leaving the plant Monday afternoon.
Chrysler's parent, Germany-based DaimlerChryslerAG announced Monday an affiliate of Cerberus will pay $7.4 billion to hold 80.1 percent of the new Chrysler Holding LLC, while DaimlerChrysler will keep the rest.
While news of the buyer was certain, little else was to Chrysler's 80,000 workers, including the 850 at the engine plant in Kenosha. Chief among their concerns were the fate of their pensions and health care costs. Cerberus must fund those hefty obligations as part of the deal.
Dave Conti worked in production for Chrysler for 33 years before he was laid off two years ago and started working for United Auto Workers Local 72 in Kenosha. The 52-year-old single father of two is counting on his pension when he retires, but wonders what will happen with the new ownership.
"We've been through it before and you never knew what will happen. You're really not sure what will come out. It's a wait-and-see attitude," he said.
Cerberus Chairman John Snow, a former U.S. treasury secretary, said the company plans to keep management in place and work with the unions to make Chrysler a profitable operation.
United Auto Workers President Ron Gettelfinger supports the acquisition, even though he wanted Chrysler to remain with Daimler as late as this past weekend.
"We pushed very hard to stay in the Daimler family. That's not gonna happen. We're going to work with the situation we find ourselves in today," Gettelfinger told reporters in Detroit.
But employees like Michele Mauder are questioning Gettelfinger's reversal.
"He had stated why the UAW would never back a private equity company," said Mauder, who works the assembly line at a Jeep plant in Toledo, Ohio. "We are a pretty strong union. For him to do that was profound. Everybody is just speechless."
Workers in Kenosha felt that the union has been losing its power as the work force gets trimmed back and if there are more cuts, it'll only get worse.
"With all the things that have happened in the last 20 years, the union really hasn't got the strength it had in the past," Conti said.
Anxiousness clouds the upcoming contract negotiations this summer. Some 13,000 positions have already been eliminated as part of a previously announced restructuring plan. John Jorgensen, a 48-year-old former pipefitter at the Kenosha plant, said he's glad he took the buyout.
"Some are wondering if they should have taken it because who knows what these guys are going to do?" he said. "It sounds like they are choppers. It sounds like they take companies apart."
Associated Press Writer Corey Williams contributed to this report from Detroit.
