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Unions Cheer Private Equity Takeover Of Chrysler

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by Felix Salmon
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May 14 2007 12:00am EDT

Unions Cheer Private Equity Takeover of Chrysler

What's with this new-found love affair between the auto unions and private equity? The main auto unions in the US, Germany and Canada all can't seem to say enough good things about the $7.4 billion deal wherein Cerberus is buying Chrysler. The deal seems to be that the unions will embrace the offer in return for assurances that there won't be any job cuts, which seems to be a reasonably sensible quid pro quo, Cerberus's history of slashing and outsourcing jobs notwithstanding.

Cerberus will now control not only Chrysler but also Delphi and GMAC, which is a little ironic. First the Big Three start selling off their suppliers and their financing arms, only to see Cerberus bring not only those former subsidiaries but now also a carmaker itself back under one roof. Maybe the spinoffs were more desperate than they were sensible.

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