United Auto Workers President Ron Gettelfinger spent much of Wednesday answering questions thrown by Chrysler workers and union leaders about DaimlerChrysler AG's decision to sell Chrysler to Cerberus Capital Management LP, a private equity firm.
"What has changed is that the sale is no longer speculation, it's a reality," Gettelfinger said during an online chat with UAW members. "In time, we hope you will come to feel the same way." Gettelfinger hosted the Internet dialogue with General Holiefield, the UAW's chief Chrysler negotiator. The pair took questions on topics that ranged from pensions and health care to buyout packages and the probability of job cuts in the future as an effect of the sale to New York-based Cerberus.
Gettelfinger said that current retiree pensions are secure and that buyout packages offered as part of Chrysler's turnaround would be honored. "The pension fund for Chrysler workers is, in fact, $2 billion over-funded for financial accounting purposes, and pension benefits are secure," Gettelfinger said. "Additionally, Cerberus has committed to contributing an additional $200 million to the pension fund and Daimler is providing a conditional guarantee of $1 billion for up to five years."
He also reiterated that there would be no additional job losses as a result of the sale and posted a letter from Cerberus outlining that commitment. "You should know that there are no plans -- other than those previously announced -- to reduce headcount," the letter said. "Excluding abnormal market conditions and productivity, there are no additional job cuts in connection with the transaction announced."
UAW members were caught off guard Monday when the union leader backed Daimler's agreement to sell its American arm to Cerberus for $7.4 billion because Gettelfinger had vocally refuted such a deal, describing private investment as a "strip and flip" business that is just looking for a quick return. Gettelfinger said he chose to support it after Chrysler executives assured him that the automaker would not be dismantled, but would flourish.
With the announcement of Chrysler acquisition just days old, the UAW is making the most out of each opportunity to communicate with members. Hours before the Internet chat, Gettelfinger and Holiefield joined Cerberus CEO Steve Feinberg and Chrysler CEO Tom LaSorda at the UAW-DaimlerChrysler National Training Center in Detroit where some 100 UAW officials from Michigan and other states were reassured of Chrysler's future. Feinberg, who also met with top labor officials and senior Chrysler manager this week, told the local union officials that Chrysler would stay intact. The reassurance came like a breeze from .
According to several sources who attended the meeting, Feinberg said, "There's no intention to sell parts of the company or break it up." He added Cerberus' $7.4 billion purchase of an 80.1 percent stake in Chrysler is a long-term investment. "He said Daimler did care about who they were going to sell Chrysler to," said one UAW local president. These statements were met with standing ovations, sources said.
Union officials who attended the meeting said they walked in to the meeting with deep reservations, but left feeling positive about the automaker's new owners. "It was a meeting to sell this to us," one local president said. "If (Cerberus) follows through with everything that they said and don't spin everything off, there's not going to be any difference. Nothing is going to change other than who owns you."
Wolfgang Bernhard, a former Chrysler executive and an adviser on the Cerberus team, also graced the meeting. According to sources, Bernhard spoke briefly, but mainly smiled and waved to familiar faces.
Union officials said they felt re-energized after the meeting, and planned to immediately share details with the workers they represent. "There was a consensus that we're back in business as an American company," one official said.
Gettelfinger told the group that Daimler will regret selling Chrysler. "Let's close the chapter on DaimlerChrysler," he said, "and open the book on Chrysler Corp."
