Big changes are not expected at Chrysler

Some union members say Daimler deal haunts them

1/3/2014

As Fiat SpA prepares to purchase the remaining shares of Chrysler Group LLC from a union-controlled trust, local officials with the United Auto Workers don’t expect major changes from the unified company.

However, some can’t help but feel a little apprehensive as they think back to the late 1990s when Germany’s Daimler-Benz AG purchased Chrysler Corp.

“The one thing that the membership’s leery of is the thing that happened with Daimler. The so-called ‘merger of equals.’ We obviously got burned by that,” said Rich DeVore, president of UAW Local 1435.

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However, experts say there’s no reason to think the Fiat deal will hurt local plants, such as the machining operation in Perrysburg Township that Mr. DeVore’s local unit represents.

Fiat has been involved with Chrysler since 2009, when the U.S. automaker emerged from bankruptcy. The Italian company became the majority-owner of Chrysler Group in mid-2011. Most recently Fiat held a 58.5 percent share of Chrysler.

Fiat announced Wednesday it had reached a $3.65 billion deal with the UAW to purchase the remaining 41.4 percent of Chrysler Group out of the union-controlled health care trust fund known as VEBA.

The unification of the two companies is something that long has been sought by Sergio Marchionne, who serves as chief executive officer of the two automakers.

“The train was heading to this station from the beginning when the Chrysler-Fiat tie-up started in the bankruptcy. We knew Fiat would eventually take over and buy out the VEBA shares,” said Kristin Dziczek, director of the Labor & Industry Group at the Center for Automotive Research in Ann Arbor.

Ms. Dziczek does not believe the completion of the deal will have any negative effect on Chrysler’s three Toledo-area plants.

For the most part, local Chrysler employees say Fiat’s involvement has been a positive one.

“Fiat’s done a lot of great things, not only at our plant, but at many of the facilities with the World Class Manufacturing,” Mr. DeVore said. “We’ve seen many improvements in a lot of the plants, we’ve got a great product line, [and] sales are up.”

Chrysler Group’s market share in the United States has grown from 8.8 percent in 2009 to 11.2 percent as of this year’s third quarter. Through November, sales were up 9 percent on the year.

Bob Cebina, the president of UAW Local 723 in Monroe, hopes those gains continue. He said Fiat has been good for Chrysler.

Still, in the back of his mind he thinks about the merger with Daimler.

“My fear is I just don’t want this deal to turn out like the DaimlerChrysler deal, where [Daimler] took all the profits out of Chrysler and ran back to Germany and left the company broke,” Mr. Cebina said.

Though it ultimately will be up to Fiat to negotiate U.S. employment and investments, Ms. Dziczek isn’t concerned.

“I think they will continue to build and sell in the U.S.,” she said. “We’ve seen a whole host of investments in Chrysler facilities since Fiat took over, to renew products [and] to renew technologies.”

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.