Will unions be the latest vultures to arrive at the buyout feast?

Workers at a Chrysler plant in Toledo, Ohio, originated the idea of the United Automobile Workers union acquiring a 70 percent share of the cash-starved U.S. automaker, possibly in exchange for cost concessions.

One model would be swapping the stake in Chrysler for cuts in the company's healthcare and pension costs, which are ample. Chrysler currently has $15 billion in unfunded healthcare and pension liabilities.

Far fetched? Perhaps. But representatives of billionaire investor Kirk Kerkorian are seeking to meet with the Chrysler workers to see if they could work out some sort of alliance.

Kerkorian's wholly owned investment company, Tracinda, has offered $4.5 billion for Chrysler, but on the condition that both the UAW and DaimlerChrysler help him to ease the company's crushing obligations to retirees.

A person familiar with Tracinda's proposal said the investment company saw areas of common interest between its offer and the proposed employee buyout, Reuters reported. [http://www.reuters.com/article/tnBasicIndustries-SP/idUSN2019679620070420]

Chrysler acknowledged that a proposal from the employee group had been received and is being considered.

The UAW did not release details of the employee buyout proposal. But it could take shape as an employee stock-ownership plans, or ESOPs, are fast coming into vogue amid buyout fever.

The most high-profile recent usage of an ESOP came about during Samuel Zell's $8 billion play for the Tribune Company. It's a tactic that could help flagging automakers like Chrysler, Ford, and General Motors bail out some of their considerable financial liabilities to unions.

The Kelso Foundation, which the Wall Street Journal [http://online.wsj.com/article/SB117701763689076002.html?mod=article-outset-box] (subscription required) has characterized as a "pro-ESOP think tank," has suggested that G.M. could use an ESOP to negotiate 20 percent wage decreases over the next 10 years in return for $20 billion in G.M. stock.

The Journal also cites a recent deal between Goodyear and the United Steelworkers Union, where Goodyear threw $1.2 billion in future healthcare liabilities into a union managed fund, in exchange for $1 billion in cash and Goodyear stock.

For Daimler's part, they're weighing the proposal, and chomping at the bit to unload the loss-making Chrysler unit to the highest bidder. Among other interested buyers are Cerberus Capital management, a Blackstone/Centerbridge Capital consortium, and auto supplier Magna International.

by Liz Gunnison