TORONTO - The head of the Canadian Auto Workers says the union now supports the takeover of Chrysler by a U.S. private equity firm after the automaker confirmed in writing that there will be no Canadian job cuts before the next contract talks in September 2008.
CAW head Buzz Hargrove met with executives from Chrysler and Cerberus Capital Management on Tuesday at the automaker's Detroit-area headquarters in Auburn Hills, Mich., to discuss details of the proposed deal, which will see Germany's DaimlerChrysler sell its North American division for US$7.4-billion.
In a phone interview after the meeting, Hargrove said that he considered the discussion to be "very positive'' and was "quite impressed with the outcome.''
"I'm convinced that this is probably better than it would've been had (Chrysler) stayed with Daimler,'' he said.
The outspoken union leader was initially opposed to the sale of Chrysler, which has numerous plants in Ontario, to a private-equity firm rather than to an industrial firm such as Canadian autoparts maker Magna International.
On Monday, shortly after the deal was announced, Hargrove told reporters that he was angry the Chrysler-Cerberus deal had been finalized without consulting the Canadian union. He also fingered the involvement of any private equity firm as particularly unappealing, saying "they're not interested in building cars.''
But on Tuesday, Hargrove said he was encouraged by discussions he had with Cerberus chief executive Stephen Feinberg.
"The fact that he showed up at the meeting himself ... reassured us that he was not in to slice, dice and sell,'' for a quick profit, Hargrove said.
Feinberg also told Hargrove that "he was in for the long term and would put in the necessary money to ... ensure that Chrysler is successful.''
Hargrove said that Cerberus didn't sign the job guarantee on Tuesday because the purchase of Chrysler hasn't closed and still requires shareholder approval.
The CAW has had dealings with Cerberus before, when the New York-based private equity firm made a major investment in Air Canada, which wrung major wage and work-rule concessions from the CAW and its other unions while under bankruptcy protection. The airline emerged from court supervision in October 2004.
