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Does Cerberus’ Purchase Of Chrysler Break The Back Of The Union?

Agent009 submitted on 5/14/2007 Official Bell & Ross Timestamp: 3:28:59 PM

16 user comments | Category: Spy Shots | Source: | SOURCE: www.thetruthaboutcars.com

In Greek mythology, Cerberus guarded the gates of Hades.

Anyone who challenged the three-headed dog was ripped to shreds. In American business, the Cerberus private equity group guards the investment firm’s cash. Unlike the mythical canine, they don’t wait for foolish interlopers. They seek out struggling companies and rip them to shreds– sorry, “turn them around.” For reasons yet to be revealed, the United Auto Workers (UAW) have welcomed today’s announcement that Cerberus has purchased Chrysler from its German overlords. Is someone about to teach an old dog some new tricks?

Ever since DaimlerChrysler’s management announced they would practically give Chrysler away explore all options for resolving Chrysler’s financial problems, the unions have fiercely opposed the automaker’s sale to an equity fund. UAW President Ron Gettelfinger listed it as the least desirable scenario possible.



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Does Cerberus’ Purchase Of Chrysler Break The Back Of The Union?

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Agent009

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EL34

"Does Cerberus’ Purchase Of Chrysler Break The Back Of The Union?"

I hope so!!!

There's was a time a long, long time ago when rich business men took advantage of poor men and Unions were created, but now the rich Union men have turned into obnoxious individuals taking advantage of poor Union workers.

— EL34 (View Profile)

Posted on 5/14/2007 4:40:00 PM | reply to this comment | Votes: 5   

mini22

As long as the tremendous health care costs continue to stand in the way Chrysler,let alone GM and Ford will never make a profit now. Hopefully Cerebus can get this dramatically reduced.

— mini22 (View Profile)

Posted on 5/14/2007 5:22:16 PM | reply to this comment | Votes: 3   

mini22

Woops-I meant Cerberus. Wasn't Wofgang Bernhard hired to cut costs?

— mini22 (View Profile)

Posted on 5/14/2007 5:26:32 PM | | Votes: 1   

atomicbri

Unions are archaic! They may have been needed back in the day when industry was not so regulated and the Unions helped the workers make sure they worked fairly. Now there are so many laws in place I don't see the point. The unions have RUINED the car makers here in the states. All the money they have to pour into the high demands of the unions have taken away valuable R&D dollars and have caused companies like Chrysler to be bought and sold....do you think Daimler is unleashing its dog because of product lineup do you? Hell no, it's because of the hideous healthcare bills and union demands that have drug them through the dredges.

— atomicbri (View Profile)

Posted on 5/14/2007 5:38:11 PM | reply to this comment | Votes: 3   

huu76

From what I've read of the deal, absolutely not.
http://www.thestar.com/Business/article/213718

Cerberus not only overpaid for Chrysler (7.4 billion), but Chrysler is still on the hook for the entire health and pension costs. Usually when someone wants to dump a company, you make them pick up some of the expenses.

Cerberus represents an influx of new funds, meaning the UAW will be on strike within 2 years. Apparently contract talks are scheduled for September.

— huu76 (View Profile)

Posted on 5/14/2007 6:23:06 PM | reply to this comment | Votes: -1   

Will_

Keep in mind that Mercedes bought Chrysler for somewhere near $36 billion.

— Will_ (View Profile)

Posted on 5/14/2007 6:37:23 PM | | Votes: 2   

NARunner

they did not overpay for Chrysler. they got chrysler at a bargain, which is why they purchased the company in the first place.

if they couldn't parlay the purchase into big profits in the future, they would have never made a bid to begin with. as will said, MB overpaid for chrysler.

— NARunner (View Profile)

Posted on 5/14/2007 7:08:54 PM | | Votes: 2   

Will_

I'm honestly starting to believe Benz screwed Chrysler over. You take on a "partnership" and then treat them like they're your disowned child. What's up with that? Chrysler would be better off today if the merger had never happened, I guarantee it.

— Will_ (View Profile)

Posted on 5/14/2007 6:39:37 PM | reply to this comment | Votes: 2   

huu76

Your opinions definitely are fair and it all depends on whether they can turn it around or not. I can very well be wrong, unfortunately finance and economics is almost like looking into a crystal ball.

Anyway, these are the reasons why I think they overpaid.

1. Product. Their economy cars are having a hard time competing. They're decent, but there's nothing to make them stand out imo.
2. Too reliant on gas guzzling engines.
3. No fuel efficient alternative, meaning no hybrid and not even an entry level diesel yet.
4. When they start chopping jobs, you can be sure the UAW isn't going to roll over and watch their numbers cut in half. Who can outlast who, the UAW or Cerberus? UAW doesn't have investors to answer to.
5. Chrysler was bleeding MB, and the next highest offer was still under $5 billion.

We'll have to wait to hear what Cerberus plans on using as a recovery plan I suppose. For the price they paid though, I'm not banking on them coming up with anything to impress me if I was an investor.

— huu76 (View Profile)

Posted on 5/14/2007 10:02:40 PM | reply to this comment | Votes: 2   

EnnNorak

This is hindsight but it always mystified me as to why auto industry executives over the last couple of decades caved in to union demands that were so onerous as to spell doom in the longer term. It speaks to our industry's generally short-term vision and "if it ain't broke, dont fix it" mentality. The UAW is not blameless however as they mostly brought the current risk of job loss on themselves.

— EnnNorak (View Profile)

Posted on 5/14/2007 10:33:57 PM | reply to this comment | Votes: 0   

austintyson

Lets bust the unions.. umm.. in 5 to 10 years we will be all wishing we had unions. If you take away the union then there is no pressure on business. Here is another point. If you building a 30k car why do you wnat to make only 15 dollars an hour. I know guys with degrees working for GM and Ford. Also do you think someone making 15 dollars an hour is going to care if the lugs nuts are tight?
I am not UAW. I am teamster. Where I work if we were not union we would be lucky to make 15 an hour. I see it in other plants we have that are not union. The management plays the rules games all the time. Also the laws in this country are not as good as people think. Look them up and see for yourself. There is not protection from the laws. Also even if there is a law, your then on your own to hire a lawyer and sue the company for the law they broke.. there are pro's and con's to unions. And once the Unions are gone then everyone is going to be making less... also just because a guy works on a line does not mean he doesn't work hard... Just because he is making a living with his hands doesn't mean he is not worth the money he is making.. don't judge these people unless you have done their job. It just shows how stupid you are. Maybe having a MBA workign in an office is only worth 5 bucks an hour....

— austintyson (View Profile)

Posted on 5/17/2007 11:21:24 PM | | Votes: 1   

tincanman99

I find all this union bashing fascinating. The lifestyles and benefits people enjoy today are because of the unions. Do you think that companies would have give this to you out of the goodness of your hearts.

Realize this if there is no union a company can do what it wants with its workers. Witness all the engineering and computer jobs being shipped to asia. This is not because of lack of innovation but rather about wages or the lack there of.

Dont whine once your job is offshored.

— tincanman99 (View Profile)

Posted on 5/15/2007 9:42:08 AM | reply to this comment | Votes: 1   

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