CAW leader promises to fight Kerkorian’s bid
The head of the Canadian Auto Workers Union says he will try to thwart billionaire investor Kirk Kerkorian’s bid for Chrysler, fearing Kerkorian will cost thousands of workers their jobs.
CAW President Buzz Hargrove said today that Kerkorian’s Tracinda Corp., as well as private equity investors who are studying Chrysler, have a history of hurting workers.
“We don’t have much confidence or trust in Mr. Kerkorian,” Hargrove said during a telephone interview. “He’s made billions by coming in, buying low, cutting jobs and throwing people out of work, then selling.”
The CAW represents about 11,000 Chrysler workers in Canada. Its contract with the U.S.-based wing of DaimlerChrysler AG doesn’t expire until September 2008, a year later than that of its U.S. counterpart, the United Auto Workers.
A UAW spokesman declined to comment on Kerkorian.
Hargrove said the CAW is most interested in suitors who would keep Chrysler intact and honor the terms of its contract. He also said he has had no contact with Kerkorian’s group, nor would he want any.
“No, not interested,” Hargrove said when asked whether he would entertain talks with Kerkorian.
On Thursday, Tracinda announced in letters to DaimlerChrysler that it was prepared to make a $4.5-billion cash offer for Chrysler and would take the company private.
Tracinda adviser and former Chrysler executive Jerome York said it would offer the UAW substantial equity in Chrysler to solve the company’s rising health care and unfunded pension costs.
The letters didn’t mention offering an equity stake to the CAW, but Hargrove said the union is not interested in that. “We see absolutely no advantage to that whatsoever,” he said.
Taking the company private, York said in a letter to DaimlerChrysler Chief Executive Dieter Zetsche, would be a long-term approach to solving Chrysler’s problems without having to worry about earnings per-share results “for the initial five-, six- or seven-year period it will likely take to build Chrysler into a robust and lasting, stand-alone entity.”
A message was left today for a Tracinda spokeswoman in New York.
The company’s letter said long-term, patient investing has been its approach, citing its decade-plus of investment in Chrysler, its eight years as controlling shareholder of Metro-Goldwyn-Mayer and 20 years as controlling shareholder in MGM Mirage.
DaimlerChrysler’s U.S. shares fell 50 cents, or 0.59%, to $83.97, in trading Thursday afternoon on the New York Stock Exchange.