Monday May 14, 2007 Toledo Ohio: Michele Mauder, President of the Chrysler Employee Buyout Committee (the “CEBC") stated:
We are very disappointed and disturbed to learn today that Daimler intends to sell Chrysler to a private equity group. Despite the fact that the Chrysler employees hired a consultant and investment banker and made every attempt to talk to Daimler and the United Auto Workers management to make a bid on buying Chrysler. Daimler and the UAW orchestrated a delay campaign to keep the Employees from making a bid. They delayed responding or didn’t respond at all to push the timing of our actions back. Daimler is basically paying $650 million to get out from under the pension liabilities in this deal. The CEBC believes it could have made a superior offer to what they have on the table now.
The UAW has not kept its word to the UAW membership and the sale is shameful.Public statements from the CAW and UAW strongly objected to any deal that included private equity. Apparently, Mr. Gettlefinger has learned how to speak out of both sides of his mouth and now blesses this deal. We wonder how they got to him and convinced him to flip his opinion.
He states that this is in the best interests of the employees but he has never spoken to the CEBC at all. Every attempt to bring Mr. Gettlefinger into the discussion was greeted with no direct discussions to even understand our plans for acquiring Chrysler, so who is he referring to? This deal is good for the union - not the employees because it represents business as usual for the union. They need to have an entity on the other side of the table to negotiate more concessions in order to stay relevant. If the employees owned the company, the position of the union would be changed and they did not want that to happen. So they sold the employees out and embraced private equity against everything they stated before.
Daimler entered into this transaction without examining all bids including the employees and Tracinda’s. Aside from the usual concerns of maximizing shareholder value by not exploring all bids, there is a big difference from being out bid and not being allowed to bid at all. The employees are furious about this and the deal is far from done, especially now and the employees are considering all actions. It's a sad commentary of the state ofemployee/ union/ management relationships.
A member of the buying group told a union representative that if they made the acquisition they would eventually close five plants and probably layoff 30,000 employees, Thirty thousand!!! We, the employees knew we would have to make certain concessions and were more than willing to do so especially if we owned the company. Our objective was to hire capable management, badly needed at Chrysler, work toward bringing the company back to its prior position of making a quality product, being financially sound and when this was accomplished and a good deal of the debt was repaid, possibly get back some of the concessions made in order to bring Chrysler to that point.
We know we would have succeeded if the employees had a stake in the company. Many changes would have been made and accepted but, now, we expect the worse. Everyone knows how these private equity funds behave when making an acquisition like this. They will cut costs to the bone, mostly on the hide of labor, return the company to profitability, again out of the hide of labor, and sell it. Or, more drastically, they will take the company through bankruptcy, get rid or the $18 billion deficit in the pension fund, and go from there.
How can anyone not recognize that Chrysler and its employees would not have been better served had Daimler at least let us into the process? It’s a foregone conclusion that had the Chrysler employees bought the company, they would have bled to make it prosper, and all would have been better off.
Again, our complaint is not that we didn’t buy Chrysler but that Daimler and our union didn’t even let us into the process. Something smells about this deal and we still intend to press our case and get into the process and buy Chrysler.