AFSCME 3357-HOF'S BLOG

Chrysler Sell-off Update 4/20/07

Cerebus Capital Management announced that it was terminating efforts to buy control of Delphi and may be focusing on its efforts to buy Chrysler.

In separate news, a group of Chrysler hourly employees is trying to arrange a buyout of the company by Chrysler Division employees. Such a deal would require allies, and in one form or another would probably involve committing a significant portion of the Chrysler workers' pension funds. In the bad old days, climaxing in the 1980s, employees were induced into pension-funded buyouts that were sometimes ill-advised financially and sometimes tied to corrupt advisers. (Remember the movie Wall Street anyone?) I'm no ERISA expert, but as I understand it, ERISA makes it more difficult to buy an employer using pension funds. Nevertheless, in some circumstances it make sense, because it's the only chance to secure jobs that won't be replaced by the market.