Some Chrysler workers wary of Cerberus deal

updated 7:04 p.m. ET May 14, 2007

DETROIT - Jeff Harris, like many Chrysler workers, woke up Monday to news that his employer will have a new owner.

And he's not so sure he likes it.

"I'm scared of what Cerberus is going to do with the company," said Harris, who has worked at a Chrysler plant in Warren for 11 years. "I'm scared they're going to gut the company or make us take more concessions."

DaimlerChrysler AG said it would sell 80.1 percent of Chrysler to private equity firm Cerberus Capital Management LP for $7.4 billion.

"I would have liked to have seen Daimler try to improve Chrysler before they sold it," said Harris, a 36-year-old Detroit resident. "I just have to wait to see what happens and hang in there."

DaimlerChrysler said an affiliate of Cerberus will hold the majority of a new Chrysler Holding LLC, while DaimlerChrysler will keep a 19.9 percent stake. Chrysler will keep its heavy obligations for pensions and health care costs — a key issue complicating DaimlerChrysler's effort to sell the division.

The prospect of a sale to a private equity firm had worried unions in the U.S. because of the firms' tendency to slash costs and jobs. But United Auto Workers President Ron Gettelfinger called it the best choice.

Gettelfinger, speaking Monday on WJR-AM in Detroit, said he made a last-ditch effort to keep Chrysler with Daimler over the weekend, but when that failed, he decided to embrace the Cerberus purchase.

"We made the pitch all the way home that we wanted the Chrysler Group to stay under the Daimler umbrella but it's not there," he said. "The decision has been made. We're supportive of it.

More on the Chrysler deal Can a Cerberus deal help out Chrysler? Chrysler Group to be sold for $7.4 billion Deal could be risky for buyout firm Some workers wary of Cerberus deal   Video: Can what's broken be fixed?   Video: Why Cerberus wants to do deal   Video: Automaker now to go private   Video: Private equity to the rescue   Discuss: A good move for both parties?

"We're going to close that past chapter. We're going to move forward."

Norris Freeman III, a 12-year Chrysler employee who also works at the Warren plant, said he thinks the Cerberus deal will not be a good one for the automaker.

"I really don't think this sale is going to work for us," he said. "I think the new company will just get rid of more workers."

"I think Cerberus is in it just for the money," Freeman said.

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