STEVE INSKEEP, host:
One surprise in the sale of Chrysler is that the United Auto Workers approved it. Chrysler is being sold to a private equity firm, the kind of company that usually does not get along with unions.
NPR's Frank Langfitt reports on why it was different this time.
FRANK LANGFITT: Ron Gettelfinger runs United Auto Workers, and until recently, he wasn't a big fan of private equity firms. Earlier this year, he said if one got a hold of Chrysler, it might strip and flip the automaker. That means cut it up and sell the parts. But yesterday, Gettelfinger struck a different tone. One reason, he said, was practicality. Here's Gettelfinger at a new news conference.
Mr. RON GETTELFINGER (President, United Auto Workers): You're dealt a hand. Now we've maintained, and I would still maintain today, that we would prefer that the Chrysler Group stay under the umbrella of Daimler, but that's not going to happen.
LANGFITT: So instead, Gettelfinger said he received commitments from Cerberus through officials at Daimler-Benz. He wouldn't say what those commitments actually are, but he insisted Daimler had spelled them out.
Mr. GETTELFINGER: Many things have already been put out in writing within the corporation in different forms. And we're going to keep them in the file just to remind people what was said at that time in the event the issue comes up. Are there going to be bumps in the road? Absolutely. We know that as we go along.
LANGFITT: Chrysler CEO Tom LaSorda said the company has no major plans with Cerberus to cut jobs, but some in the labor community sounded worried.
Mr. BUZZ HARGROVE (President, Canadian Auto Workers): Well, I'm very, very concerned about it.
LANGFITT: That's Buzz Hargrove. He runs the Canadian Auto Workers. They represent more than 10,000 workers at Chrysler factories. Hargrove hasn't spoken to Cerberus and remains skeptical.
Mr. HARGROVE: Usually, the biggest way to cut labor cost is cut people, and that's our big concern here and we're going to fight like hell against them.
LANGFITT: But Cerberus may be looking for another way to control costs. As part of the deal, Cerberus agreed to take on Chrysler's more than $18 billion in pension and health care obligations. That's a staggering amount of money, far more, in fact, than the entire company is worth.
It also puts Chrysler at a huge disadvantage against foreign competitors like Toyota. So Sean McAlinden thinks Cerberus may ask the union to cut retiree benefits. McAlinden is an auto analyst in Ann Arbor.
Mr. SEAN MCALINDEN (Analyst, Center for Automotive Research): It's a deal that has to be done in order to make the company, you know, viable. Because I really don't see how Cerberus could eventually turn this thing over and make a nice return on it with anyone. Why would you want to buy a share in a company that on paper, you know, when you consider these liabilities, has no real net value?
LANGFITT: What could the union get in return? McAlinden says a couple of things. First, it might get control of the pension fund, which would move outside the company and be protected if Chrysler ever went belly up. Second, Cerberus has agreed to invest $5 billion dollars. That money could help preserve jobs, the union's top priority.
Mr. MCALINDEN: It's possible in this deal that every Chrysler plant gets new investment.
LANGFITT: Of course, until we hear more from the union and Cerberus, it's hard to know what kind of arrangement the two might work out. The union begins contract negotiations this summer with all three Detroit automakers, so it has to be careful what kind of deal it strikes with Chrysler because odds are Ford and General Motors will ask for the same thing.
Frank Langfitt, NPR News.
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INSKEEP: You can peek under the hood of the Chrysler deal by going to our Web site npr.org.