Support for the Magna International Inc. bid for Chrysler has arrived from an unexpected quarter.
If Chrysler must be sold, Magna is preferred over private equity firms, a United Auto Workers union local in Toledo, Ohio, says.
“If DaimlerChrysler is adamant to sell and Magna would be a leading contender, our committee would prefer the option of partnership with them versus a private equity firm,” said Michele Mauder, who heads the DaimlerChrysler Employee Buyout Committee.
The committee is a group of members from UAW local 12 in Toledo that is offering workplace concessions to Chrysler in return for employee ownership in the auto maker. Both the UAW and the Canadian Auto Workers union have expressed opposition to private equity ownership of the company because of fears that such owners would eliminate long-standing labour agreements, close plants and then flip the company once it returned to profitability.
“Our true hope is to keep DaimlerChrysler together and partner between its employees for the corporation's long-term security,” Ms. Mauder said in a letter to DaimlerChrysler chairman Dieter Zetsche.
Private equity firms Blackstone Group LP and Cerberus Capital Management LP have been identified as bidding for Chrysler.
Gambling mogul Kirk Kerkorian has also made a bid through his Tracinda Corp. investment company.
Magna shares were down 4 cents to $88.81 in mid-day trading on the Toronto Stock Exchange.
© The Globe and Mail
