Chrysler workers were warned a few weeks ago by union officials that a private equity owner would be the worst thing that could happen to them. So many were as surprised as anyone Monday to learn that the sale of Chrysler to Cerberus Capital Management had their leaders’ support.
“It makes me real nervous and a little confused,” said Anthony Watson, 36, a chassis assembly worker arriving for his shift at Chrysler’s Warren truck plant just north of Detroit. “A lot of us believe we’re being misled.”
On April 18, Ron Gettelfinger, president of the United Automobile Workers, vowed he would fight the sale, declaring a private investor would “strip and flip” the company to earn a quick profit.
But Mr. Gettelfinger unexpectedly changed his thinking after the $7.4 billion sale of a controlling stake was announced early today. In a statement, he said the transaction “is in the best interest of our membership, the Chrysler Group and Daimler.”
The abrupt reversal resulted from a four-hour meeting Saturday in Germany involving Mr. Gettelfinger and the chief executives of DaimlerChrysler and Chrysler, Dieter Zetsche and Thomas W. LaSorda. Mr. Zetsche said two aspects of the deal in particular — that Daimler would retain a minority share of Chrysler and that Mr. LaSorda would retain his position — appeared to sway Mr. Gettelfinger.
In an interview this morning on the Detroit radio station WJR-AM, Mr. Gettelfinger said he began the meeting with a “last-ditch effort” to persuade Daimler to keep Chrysler but that Mr. Zetsche “made it unequivocally clear that that was no longer an option.”
Mr. Zetsche then spent 90 minutes explaining to Mr. Gettelfinger and General Holiefield, who heads the U.A.W.’s DaimlerChrysler department, how Daimler officials arrived at their decision, and Mr. Gettelfinger said he would support the deal.
“It’s time for us to get all of this behind us and move forward,” Mr. Gettelfinger said today. “Our goal now will be to prove that Daimler made a mistake because we’re going to make them successful.”
At a news conference in Stuttgart, Germany, DaimlerChrysler and Cerberus officials maintained that Chrysler workers are in good hands.
“Cerberus has a good record of working successfully with companies that are organized,” said John Snow, the former treasury secretary and chairman of Cerberus. “We respect the role of organized labor. We appreciate the support the U.A.W. has given.”
The statement from Mr. Gettelfinger “tells us a lot,” Mr. Snow continued. “We’re going to work to make sure this company succeeds and as the company succeeds it will maximize opportunities for workers. Our objective is a successful Chrysler and a successful Chrysler creates opportunities.”
While Mr. Gettelfinger has expressed his support for the deal, his counterpart at the Canadian Automobile Workers union, Basil E. Hargrove, remained skeptical.
“I’m not at all comfortable with this new ownership makeup,” Mr. Hargrove said in an interview. “The history of private equity has been to buy, then slash and burn a lot of jobs, and then get out with a lot of money for a handful of people.”
Mr. Hargrove said he was scheduled to meet with Chrysler officials on Tuesday to discuss the sale.
He noted that Mr. Gettelfinger, who holds a seat on the company’s supervisory board, knows more about the deal because “he’s closer to it than I am.”
Although Cerberus and Chrysler said there were no plans for job cuts beyond the 13,000 that have already been announced, Mr. Hargrove said, “It’s not clear how long that commitment is for.” Still, he went on, that assertion “is better than no statement at all.”
At the Warren truck plant, many workers leaving after the overnight shift said they were going home to research Cerberus. Word of the sale had filtered through the factory in the middle of the night, but most believed it was simply another rumor until the morning newspapers arrived and were passed around.
“It’s a company that most of us aren’t familiar with,” said Richard Burns, 39, an assembly line worker who has been with Chrysler for nine years. “We’re scared they’re going to break us up.”
Cerberus became known to some in Detroit last year, when it bought a majority stake in General Motors’ finance arm. Soon afterward, it emerged as the leader of an investment group that planned to bring the Delphi Corporation, the parts supplier spun off by G.M., out of bankruptcy.
Cerberus recently said that it was pulling out of that deal, however, after it failed to reach an agreement with the U.A.W. on reduced wages and benefits after long negotiations. Mr. Hargrove said that in particular has stoked his concerns about Cerberus, calling the cuts it demanded at Delphi “beyond imagination.”
Mr. Snow, when asked about tension with the U.A.W. from the Delphi talks, replied, “I can say without any hesitation that the characterization you gave is clearly erroneous.”
