Private equity firms have been circling Chrysler in the hopes of getting a cut-rate deal for the US arm of DaimlerChrysler (DCX). There have also been press rumors that GM (GM) is looking at the company as a merger target and that the Daimler board might take GM shares as part of a sale.
One of Chrysler’s supervisory committee board members who represents labor has come out and said that any deal that would break up Chrysler is not in the cards. Half of the members of the Daimler board represent employees, so the faction can’t be ignored.
The employee members of the board are likely concerned that a private equity firm might sell off Chrysler in pieces and that retaining jobs for union workers could be difficult. A deal with GM would at least mean that union groups like the UAW would have some leverage since they already represent the lion’s share of the largest car company’s blue collar workers.
The news media has been full of speculation that a private equity firm will emerge as the buyer of Chrysler. But, it now appears that such a move could be blocked at the board level.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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