UAW Has Not Endorsed Chrysler Sale To Magna

By From beurs.nl| Apr 29 2007
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United Auto Workers President Ron Gettelfinger said Friday that the union has not endorsed a sale of the Chrysler Group to Magna International Inc. (MGA), even though a press report has indicated the UAW would support such a sale.

Gettelfinger, speaking to Detroit radio station WJR on Friday, said the UAW continues to maintain its stance that DaimlerChrysler AG (DCX) should not sell Chrysler to anyone.

But KeyBanc analyst Brett Hoselton, in a Friday research note, said the UAW has approached Magna with a framework concession package 'to facilitate its sale' to Magna and potential partner Onex Corp. (OCX.T), a Canadian investment firm.

Hoselton said in the note that KeyBanc believes there is an 'increased likelihood' that Magna will take a direct minority stake - 25% to 50% - in Chrysler.

In a conference call Friday, Chrysler Group Chief Executive Tom LaSorda declined comment on details related to the sale, but said all options remain on the table.

On Wednesday, a report suggested the UAW joined the Canadian Auto Workers in supporting the sale of Chrysler to Magna, which is one of the bidders making a play for the U.S. auto maker. Gettelfinger said that a CAW official was misquoted by the Detroit News as having implied the UAW was on board with such a plan.

Gettelfinger said the union has not expressed support for Magna or any other prospective buyers.

'As it turned out, the CAW representative was misquoted,' Gettelfinger said. He said that he has discussed the situation with the CAW representative, Jerry Dias, and 'was satisfied with his communication that (the) story was totally wrong.'

The Detroit News said Friday in a statement sent to Dow Jones Newswires, 'The quotes in the story were 100 percent accurate.'

The UAW and CAW are not affiliated, but both unions represent Chrysler workers in North America.

During the radio interview, recently posted on WJR.com, Gettelfinger reiterated his stance that Chrysler should remain a component of DaimlerChrysler. DaimlerChrysler in mid-February first said it was considering strategic options for Chrysler, including a sale.

Earlier this year, Gettelfinger said he was getting the feeling that DaimlerChrysler officials definitely were moving in the direction of wanting to dispose of Chrysler. He said the company's recent shareholder meeting in Berlin reinforced the viewpoint that investors 'seemed pleased with the idea of getting rid of the Chrysler Group.'

Nevertheless, the UAW is fighting back.

'We have established what we refer to as a war room where we have our people taking a look and monitoring every conceivable situation at Daimler,' Gettelfinger said. 'We have publicly (and) repeatedly said that we feel like we could make the case why DaimlerChrysler should keep the Chrysler Group.'

Shares of Magna rose 63 cents, or 0.8%, to $80.40 Friday. Shares of DaimlerChrysler were down 81 cents, or 1%, to $81.33.

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