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Kerkorian seeks meeting with Chrysler employee group

From yahoo.reuters| April 23,2007

Representatives of billionaire investor Kirk Kerkorian are seeking a meeting with a group of Chrysler workers proposing an employee-led buyout of the automaker to consider some form of a cooperation, a person familiar with the effort said on Friday.

A renegade group of Chrysler workers in Toledo, Ohio, has formed an "employee buyout committee" and sent a formal proposal to Chrysler, the company said on Friday.

The bid comes in the wake of a $4.5 billion offer for Chrysler from Kerkorian's investment company, Tracinda Corp. The Tracinda offer includes a provision that a "substantial" share of equity in the automaker would be handed over to its major union, the United Auto Workers.

A person familiar with Tracinda's proposal said the investment company saw areas of common interest between its offer and the proposed employee buyout. As a result, Tracinda is seeking a meeting with the employee group to see if there are potential areas of cooperation, the person said.

Chrysler Group spokesman Mike Aberlich said the proposal from the employee group had been received by Chrysler Chief Executive Tom LaSorda.

"It's been forwarded to the people that are looking at the options," he said.

Details of the employee buyout offer were not immediately available, and representatives of the employee group could not be reached for comment.

UAW spokesman Roger Kerson could not be reached for comment.

A second person familiar with the sale process said the employee buyout proposal was being studied by the UAW and Chrysler's corporate parent, DaimlerChrysler AG (DCX.N: Quote, Profile , Research) (DCXGn.DE: Quote, Profile , Research).

Analysts expect the UAW to be central to any final deliberations needed to clinch a deal to sell Chrysler.

In one sign of the UAW's influence in the sector, private equity firm Cerberus Capital Management indicated this week that it would withdraw from a $3.4 billion investment to support Delphi Corp.'s (DPHIQ.PK: Quote, Profile , Research) emergence from bankruptcy after failing to close a deal on labor costs with the union.

UAW President Ron Gettelfinger, who sits on DaimlerChrysler's supervisory board, said this week that he would press Daimler to retain Chrysler.

Daimler strategy chief Ruediger Grube has been in New York for talks with a number of bidders for Chrysler, and one person familiar with the situation has said preliminary talks could be completed as soon as May.

Bidders for Chrysler include private-equity firms Cerberus Capital Management [CBS.UL] and Blackstone Group [BG.UL] and Canadian auto parts maker Magna International Inc. (MGa.TO: Quote, Profile , Research), according to people familiar with the bids.

Kerkorian's $4.5 billion bid is the only offer that has been made public.

Gettelfinger told reporters on Wednesday that he had met potential Chrysler buyers, adding that the UAW was opposed to any bid from "strip-and-flip" financial investors.

DaimlerChrysler Chief Executive Dieter Zetsche said in February all options were open for Chrysler, which lost nearly $1.5 billion in 2006 as buyers shifted away from the light trucks and sport utility vehicles that generated two-thirds of its total sales.

Chrysler plans to cut 13,000 jobs as it seeks to return to profitability by 2008.

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