Now that the dust has settled on the United Auto Workers (UAW) contract negotiations with Chrysler, UAW boss Ron Gettelfinger is finally speaking out about the American automaker's private equity owners. And he likes them. In practice. But not in theory. Speaking to at a Reuters industry pow-wow, Gettelfinger declared that "Private equity firms, a lot of them, they're vultures; a lot of them are strip and flip. 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." Some? Like, say, Cerberus, who fired 10k UAW members before the ink was dry on the UAW's new contract? The same Cerberus who sweet-talked Gettlefinger into going along with the sale in the first place? "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.'" If that isn't enough to make a union member's head spin, Gettelfinger also backed away from his previous contention that he was blind-sided by Chrysler's post-contract job cuts. "The union leader also said that job cuts… were not a complete surprise, given weakness in the U.S. autos market. 'We knew there were going to be adjustments,' he said. I'm sure ex-Chrysler workers will be delighted to learn they were "adjusted" rather than "fired."
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It is readily apparent that no one in the auto industry has any idea how any of the current woes will play out. Every manufacturer is struggling with issues that are beyond their control- sky high energy costs, sub-prime mess and a fickle retail buyer. It just proves that old saying that it is better to keep your mouth shut and have people think you are an idiot or open it up and prove you are,well, an auto or union exec.
If private equity firms are vultures, that must make labor unions tapeworms. If one studies non-Keynesian economics they will discover strip&flip is an economic positive…Moving assets to higher value.
At least Gettelfinger is smart enough not to kill the host.
We’ll see just how smart Cerebus thinks they are; and we’ll see just how smart they really are. Me thinks we will see that being a financial paper dealer is a long way from running a successful car company. And methink that the Cerebus egos will eventually be forced to deal with it even if they won’t acknowledge it. They should have shorted instead of gone long.