21 April 2007
In lieu of getting out of Dodge
So what are the chances that the Chrysler Group might wind up owned by its employees?
About 25 hourly workers calling themselves the "Employee Buyout Committee" are proposing that workers take a 70 percent stake in Chrysler with DaimlerChrysler retaining the remaining stake. Michele Mauder, who works at Chrysler's Toledo Supplier Park, where the Jeep Wrangler is built, and is a member of the committee, said the workers believe employee ownership is the best option for Chrysler's 50,000 UAW workers. "The bottom line is the corporation won't take the hit, it's the employees, the shareholders and the consumers," she said in an interview. "So we need to work as a team."
The employee buyout committee was notified by the UAW last month that its proposal is being evaluated by the union's legal department, Mauder said.
The proposal was mentioned by a shareholder at DaimlerChrysler's annual meeting April 4, and on Tuesday, Mauder received written notification from DaimlerChrysler that the proposal is being reviewed by the German automaker.
The UAW itself hasn't made any statement one way or another, though UAW President Ron Gettelfinger has said he would prefer that DaimlerChrysler hold on to the Chrysler Group.
Separate proposals by Kirk Kerkorian, who in 1995 mounted an unsuccessful bid for Chrysler and who wound up suing DCX, and by Palm Beach investor Daniel Imperato, call for dividing up at least some of Chrysler's equity among employees.
While the employee buyout plan is a long shot, and if successful, an incredible risk for the employees, it's also inspiring that a group of workers would be the masters of their own fate. Unfortunately, it's not yet known how much the employees could offer for a 70% stake in their employer, which, in the end, is likely DaimlerChrysler's number one consideration in this sale
I think this could work, though obviously it won't be a straight cash deal: more likely, there will be a period of years during which at least part of a worker's compensation will be paid in Chrysler stock rather than in wages or in benefits. Fifty thousand Chrysler workers times $100,000 would come to $5 billion, which is a hefty proportion of the $5-7 billion rumored to be sought by DCX. (Kerkorian's bid was for $4.5 billion.)
And whether this works or not, I'd prefer it to having the company taken private and then ritually dismembered for the sake of the bottom line.Posted at 9:38 AM to Common Cents , Driver's Seat