Germany’s Automobilwoche reports that the bidding for Chrysler is all but over as the only serious interest comes from Magna International (MGA), the Canadian-based auto parts company. It is unknown what Magna might pay DaimlerChrysler (DCX) or what may become of the auto firm’s pension liabilities and labor contracts.
If the report is true, a company with a market cap of $8.6 billion and sales of $22.8 billion would be taking on a much larger operation. How Magna’s management will be able to operate both companies is a mystery.
Labor unions have fought to keep private equity interests away from Chrysler, driven by the fear that they would simply break the company into pieces and dispose of as many jobs as is possible. But, without the UAW’s blessing, a sales to any entity would be extremely difficult. A nationwide strike could badly cripple the company financially. a strike could cut sharply into the union’s funds, but it may be a last stand they are willing to take.
Douglas A. McIntyre
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