Tracinda meets with workers group on Chrysler bid
(Adds comments from CAW president in paragraphs 10-16)
DETROIT, April 23 (Reuters) - Representatives of billionaire investor Kirk Kerkorian, who has bid for Chrysler Group DCX.N, met a group of Chrysler workers on Sunday who have separately proposed an employee stock ownership plan for the automaker, people familiar with the matter said on Monday.
The meeting follows a $4.5 billion offer for Chrysler from Kerkorian's investment arm, Tracinda Corp., which said it would consider giving United Auto Workers, Chrysler's largest union, a "substantial share of equity" as part of the deal.
Chrysler's German parent, DaimlerChrysler AG DCXGn.DE, has been meeting with potential buyers for its U.S. unit, including private equity firms Cerberus Capital Management [CBS.UL], Blackstone Group [BG.UL] and Canadian auto parts maker Magna International MECa.TO, people familiar with the discussions have told Reuters.
People familiar with the matter said Tracinda representatives met with an employee buyout group in Toledo, Ohio over the weekend, and that the talks were in an early stage.
The employee buyout committee has separately sent a formal proposal to DaimlerChrysler, offering to take a 70 percent stake in the automaker over a period of five years or more on behalf of its roughly 50,000 U.S. factory workers.
Tracinda, which sees areas of common interest between its offer and the proposed employee buyout, wants to leave the door open to further discussions with the UAW group, a person familiar with the situation said.
A Tracinda spokeswoman had no comment. The lead representative for the employee buyout committee was not immediately available for comment.
Auburn Hills, Michigan-based Chrysler, which lost nearly $1.5 billion in 2006, is in the middle of a restructuring that includes cutting 13,000 jobs and returning to profitability by 2008.
DaimlerChrysler Chief Executive Dieter Zetsche is expected to meet with labor groups this week, when UAW President Ron Gettelfinger plans to ask the German automaker to hang on to Chrysler and allow it to go through its restructuring.
Buzz Hargrove, president of the Canadian Auto Workers union, said Chrysler's major unions were united in their opposition to Daimler moving ahead with a sale.
"That has been the position of the UAW and ourselves and...the union in Germany since the outset of this thing -- to encourage Deiter Zetsche and the board of directors to keep Chrysler...within the Daimler Chrysler family," Hargrove said.
"They put a lot of money and a lot of effort into getting to where we're at today and don't walk away from it because we had a few bad months last year."
But Hargrove conceded that "backing away from a sale" now could have negative consequences for Daimler and Zetsche including "a huge lack of confidence by the major institutional investors and (a) big drop in stock prices."
He added: "So it's not clear that we're going to have any impact, but that's where we're at."
Hargrove said the CAW opposed the idea of an employee buyout of the kind proposed by the group of workers in Toledo since it would shift costs and risks to Chrysler's work force. "It's a small group of workers out of one plant and one local union," he said of the Toledo group. "The only thing they share in common with the rest of us is the frustration and insecurity given all the rumors that are out there."
(Additional reporting by Frank Pingue in Toronto)
((Reporting by Jui Chakravorty, editing by Carol Bishopric;Reuters Messaging: Jui.chakravorty.reuters.com@reuters.net; email: jui.chakravorty@reuters.com; tel:313-967-1903)) Keywords: CHRYSLER SALE/TRACINDA
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