DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger said that while he remained suspicious of private equity firms, there were few options when Chrysler was sold to one of the most prominent, Cerberus Capital Management LP CBS.UL.
So far Cerberus had kept the commitment it made to the union, Gettelfinger said at the Reuters Autos Summit in Detroit on Tuesday, but he repeated his criticism of buyout firms for buying companies, stripping them down and selling them.
"Private equity firms, a lot of them, they're vultures; a lot of them are strip and flip," Gettelfinger said. "I think that can be said as a matter of fact. There are some of those folks that I almost feel dirty when they leave a room after I have met with them."
Gettelfinger in the past has railed against financial buyers such as Cerberus, but stunned analysts and some of his own membership earlier this year by backing the firm's purchase of Chrysler Group.
He acknowledged the seeming contradiction, saying that maybe he was "speaking out of both sides of my mouth." But he said: "If you look at what was on the table at the time, as far as the Chrysler deal, there wasn't a lot of options out there."
Gettelfinger said Cerberus founder Stephen Feinberg had pledged to stay out of direct involvement in the latest labor contract negotiations with the UAW, and he had kept this commitment.
The union leader also said that job cuts announced by Chrysler after the new contract had been ratified by members were not a complete surprise, given weakness in the U.S. autos market. "We knew there were going to be adjustments," he said.
Cerberus acquired an 80 percent stake in Chrysler from former parent Daimler AG (DAIGn.DE: Quote, Profile, Research, Stock Buzz) in a $7.4 billion deal, unwinding a nearly decade-old merger. Daimler retained a 20 percent stake.
(For summit blog: summitnotebook.reuters.com/)
(Reporting by Megan Davies and Kevin Krolicki; Editing by Lisa Von Ahn)
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