The United Auto Workers is studying a long list of proposals from a group of Chrysler workers in Toledo who are pushing for employee ownership of the ?for sale? automaker. 25 hourly workers who call themselves the ?Employee Buyout Committee? is proposing for workers to take 70 percent stake in Chrysler— producer of quality Chrysler mufflers — with DaimlerChrysler retaining the remaining stake.
According to Michele Mauder who works at Chrysler?s Toledo Supplier Park, where the Jeep Wrangler is manufactured and some Chrysler parts are produced like the Chrysler muffler — who is a member of the committee, the workers believe employee ownership us the best option for Chrysler?s 50,000 UAW workers. She added, “The bottom line is the corporation won’t take the hit, it’s the employees, the shareholders and the consumers. So we need to work as a team.”
Mauder also said that the employee buyout committee was notified by the UAW last month stating that its proposal is being evaluated by the union?s legal department. The proposal was brought up by a shareholder at DaimlerChrysler?s annual meeting last April 4 and last Tuesday, Mauder received written notification from DaimlerChrysler that the proposal is being studied by the German automaker.
Roger Kerson, UAW spokesman could not be located for comments late Thursday. On the other hand Mike Aberlich Chrysler spokesman was free to give a statement he said that 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 already expected for the proposal to be discussed at a DaimlerChrysler supervisory board meeting next week. Although she is aware that the proposal may prove to be a long shot for them but she said at least the workers tried. She further added, “Unless they come up with a better plan, this is it. It’s really in Daimler’s ball court now.” Maude noted that the Chrysler workers during the 80s owned shares in the company after the automaker turned to the federal government for loans to help it out of its financial crisis.
Employee ownership has already been employed in other struggling industries which include airlines, and steel but unfortunately not widely considered in the auto industry.
Mauder pleads the employees? case in a letter she addressed to Zetsche dated April 9 with their proposal attached. She wrote, “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. 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. 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.”
Currently DaimlerChrysler is already in negotiations with several potential buyers which includes two of the country?s largest private equity firms, Cerberus Capital Management LP and Blackstone Group, that is working with Centerbridge capital Partners. Also in the lineup is Magna, which is partnered with Onex Corp., a Canadian buyout firm.
There is also the American billionaire investor Kirk Kerkorian who has submitted his $4.5 bid for Chrysler and offered an ownership stake in company for union.
Chrysler CEO Tom LaSorda has declined to reveal any details on the ongoing negotiations. He said, “I’ll just say this. Discussions continue.” Kerkorian?s offer who has tried to takeover Chrysler in 1995 includes an equity stake for the UAW as well as for Chrysler management. UAW President Ron Gettelfinger said that the private equity bidders for Chrysler have already talked to the union about the possibility of giving workers a stake in the automaker.
However Gettlefinger has reiterated time and again that he would still prefer for DaimlerChrysler to keep Chrysler and pledged to use his seat on the 20 member DaimlerChrysler supervisory board to counter any deal that would make Chrysler private. The supervisory board will meet next week in Germany. Other labor representatives on DaimlerChrysler?s board said that they would not support any bidder that plans to break up the company.
Mauder also stated that their proposal is based on a thorough researched which she with a team of experts on the subject have conducted from Kent State University. The group also hopes that local unions would also join them in their cause. They have also reached out to local UAW leaders in Detroit for support.
The members of the employee committee will join the 21st Annual Ohio Employee Ownership Conference today to further understand the business venture they are pushing for. Plus they also plan to create a web site where workers can correspond with each other about the idea of becoming owners of Chrysler. Labor expert Shaiken said that the worker?s stand over private equity purchasing Chrysler is ?quite justified?. “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,” he added.
Jerick Brooks is a BS Computer Science graduate at Columbus State University. He has passion for anything car-related especially car racing. He loves writing and currently works as an IT consultant in a company based in Atlanta.
&