news services
updated 5/17/2007 8:15:57 AM ET 2007-05-17T12:15:57

DaimlerChrysler will do its best to stay independent once the sale of U.S. arm Chrysler goes through, Chief Executive Dieter Zetsche was quoted by the Wall Street Journal as saying.

The paper reported on Thursday that Zetsche had said in an interview that the company, to be known in future as Daimler AG if shareholders approve, probably will not be involved in big deals for other carmakers.

DaimlerChrysler announced on Monday it would sell an 80.1 percent stake in Chrysler Group to private equity firm Cerberus Capital Management, unwinding the 1998 merger of Daimler-Benz and Chrysler that never worked out as planned.

Zetsche said the company might seek deals to expand its truck business, especially in the U.S. or India, the paper reported.

On Wednesday, United Auto Workers leaders said they have received assurances that Chrysler pensions will be protected when the company is sold to Cerberus later this year.

In an online chat with union members, union President Ron Gettelfinger and Vice President General Holiefield said Chrysler’s pension plan is $2 billion overfunded and that its benefits are secure.

“Additionally, Cerberus has committed to contributing an additional $200 million to the pension fund and Daimler is providing a conditional guarantee of $1 billion for up to five years,” they wrote.

One member questioned Gettelfinger on why he vehemently opposed a private equity firm buying Chrysler a few weeks before the sale, then changed his stance once the Cerberus deal was announced on Monday.

Gettelfinger replied that his stance changed when the sale became reality and when he was told by the companies that keeping Chrysler with Daimler was not possible.

“Both General and I, as well as the International Executive Board, believe that this outcome will be to the benefit of our active and retired membership,” Gettelfinger wrote. “In time, we hope you will come to feel the same way. In the meantime, its time for us to close this chapter and move forward.”

Gettelfinger and Holiefield said Chrysler’s long-term health care liability for retirees is in the billions of dollars, but is part of a bigger health care crisis in America.

Chrysler executives, as well as those from Ford Motor Co. and General Motors Corp., have said they need to cut that liability in order to reduce costs and better compete with Asian automakers. All have said the liabilities will be on the table when they bargain with the UAW on a national contract later this year. Chrysler’s obligation is estimated at $19 billion.

“There is tremendous liability in projected health care costs for retirees,” Gettelfinger and Holiefield wrote. “America’s health care crisis is out of control and that’s why the UAW supports a national, single-payer, comprehensive national health care plan for every man, woman and child. We cannot solve the health care crisis in any one set of negotiations with any one company.”

The two also reassured members that Cerberus had no plans to reduce the hourly work force beyond the 13,000 that Chrysler announced on Feb. 14 a part of its restructuring plan.

The UAW, the two said, received a commitment in writing that said: “Excluding abnormal market conditions and productivity, there are no additional job cuts in connection with the transaction announced.”

The Associated Press and Reuters contributed to this report.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%