Kerkorian's firm meets workers over Chrysler
Talks in 'very early stages' after billionaire investor made separate $4.5 billion deal.
DETROIT (Reuters) -- Representatives of billionaire investor Kirk Kerkorian, who has bid for Chrysler Group, 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 (down $0.72 to $80.53, Charts), has been meeting with potential buyers for its U.S. unit, including private equity firms Cerberus Capital Management, Blackstone Group and Canadian auto parts maker Magna International (down $0.13 to $78.99, Charts).
People familiar with the matter said Tracinda representatives met with an employee buyout group in Toledo, Ohio, over the weekend, and that the talks are "in very early stages."
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.
Chrysler, like fellow American automakers GM (up $0.16 to $31.84, Charts, Fortune 500) and Ford (up $0.16 to $7.91, Charts, Fortune 500), have seen their market share decline amid changes in the industry and increased competition from Asian car makers.
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.