Kerkorian vows to be true partners with UAW

The UAW as part owner of Chrysler? That would be most interesting

Kerkorian vows to be true partners with UAW
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070407/AUTO01/704070364/1148

Kirk Kerkorian envisions a "true partnership" with labor and management that
includes equal sharing in the "risks and rewards" of his $4.5 billion bid to
buy the Chrysler Group.

In a statement released Friday, the billionaire financier said his plans are
nothing short of a "transformation" of Chrysler that aligns the interests of
all employees, executives and investors.

His comments came as news surfaced Friday that other Chrysler bidders also
may seek union support by offering workers part ownership in the automaker.

But Kerkorian is the first bidder to go public with a purchase price and
strategy to partner with organized labor.

"We believe the only realistic plan for Chrysler is one in which all parties
share equitably -- with no one group (including ourselves) trying to gain an
unfair advantage over the others," said Tracinda Corp., Kerkorian's
investment firm.

The release elaborated on Kerkorian's surprise announcement Thursday that he
had joined three other bidders in the competition to acquire the U.S.
division of DaimlerChrysler AG.

Kerkorian, who tried to take over Chrysler in 1995, hopes to distinguish his
bid from others with his open-ended offer to include management and the
United Auto Workers in the ownership of the automaker.

"What we are talking about is a transformation in the way risks and rewards
in a large enterprise are shared," Tracinda said.

There were no further details from Los Angeles-based Tracinda on how a
Kerkorian-owned Chrysler would be structured. Kerkorian's top aide, Jerry
York, was unavailable for comment Friday.

No UAW-Tracinda meetings

The Kerkorian offer brings to four the number of bidders in contention for
Chrysler. The automaker's German parent company said Feb. 14 all options
were on the table to turn around the struggling arm, including a sale. The
other known bidders are Cerberus Capital Management, a partnership of
private-equity firms Blackstone Group and Centerbridge Partners and the
Canadian auto supplier Magna International Inc.

In the release Friday, Tracinda was vague about how a "true partnership"
would work with executives and the UAW. However, the firm said that any
arrangement with management and labor must be consensual.

"We acknowledge that an approach cannot be forced on any of the parties, but
rather can only be achieved with all parties feeling as if they are the
recipients of a fair deal," Tracinda said.

UAW President Ron Gettelfinger said in a radio interview Friday that he has
yet to speak with Kerkorian, York or any other Tracinda official about the
bid.

"I've had no discussions with anyone from Tracinda, and I don't recall that
anyone in our organization has," Gettelfinger said on the Paul W. Smith Show
on Detroit station WJR.

He added that other bidders had already approached the union and made it
offers of equity stakes in Chrysler.

"We've heard that from other interested parties that we have had
conversations with," he said.

Gettelfinger declined to characterize whether the union supports or opposes
the idea of union workers owning stock in the former No. 3 U.S. automaker.

However, he has previously criticized private-equity firms, in particular,
for "stripping and flipping" the assets of troubled companies.

Kerkorian's offer could include rewarding blue-collar employees with stock
for the company's performance and giving board representation to union
leaders, according to people familiar with the possibilities.

But sources close to the talks said that Cerberus and the
Blackstone/Centerbridge group are also discussing stock-ownership deals and
board seats to gain union support for their bids.

'This is major'

The Chrysler sale process is expected to heat up next week when executives
of DaimlerChrysler and its investment banker, J.P. Morgan Chase, begin
deeper discussions with bidders.

The German automaker is likely to choose a single bidder to negotiate with
exclusively, possibly by the end of April.

Kerkorian's offer was the last one received by DaimlerChrysler, and came
after the three other bidders had already made extensive on-site visits to
Chrysler headquarters in Auburn Hills.

DaimlerChrysler CEO Dieter Zetsche told shareholders at the company's annual
meeting this week that talks were under way with interested parties but
declined to give a timetable for a Chrysler sale.

In his radio remarks, Gettelfinger acknowledged that DaimlerChrysler is
likely to divest Chrysler.

"Initially, our position was that we would prefer that the Chrysler Group
stay as part of Daimler-Benz," he said. "Obviously, after attending the
shareholders meeting, and you can see what the impact on the stock was by
the announcement on Feb. 14, it appears that something is definitely going
to happen."

However, he implied that any deal will take considerable time to negotiate.

"I don't see this as a simple deal," he said. "This is major. It's going to
take a lot of work and a lot of effort and a lot of internal analysis of
exactly how to handle this."

 

What does Kerkorian know about automobile manufacturing? He might have been
a major shareholder, but so?

DAS

For direct replies replace nospam with schmetterling
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Good point, but in response given the past business results from the
existing (well qualified and assumed very knowledgeable) executive
management team, why is knowledge of manufacturing processes a requirement
at all?

Bob

 

I would hope he would get effective management and let them do their
thing. Chrysler has lacked this for several years.