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From Doug Henwood's blog, on the whole Chrysler/UAW/VEBA thing:
here
- Chrysler stock hasn’t traded publicly since Daimler took it over in 1998. Cerberus, a private equity firm, bought 80% of Daimler’s stake in 2007, keeping the stock in private hands. But should Chrysler recover and offer its stock to the public, and should that stock appreciate in value, and should the UAW ever choose to sell those shares for cash, it would have to turn any amount in excess of $4.25 billion to the U.S. government. The terms of the Cerberus deal valued the firm at $9.25 billion just two years ago. Obviously that was an inflated price, but it does give some idea of what a recovered Chrysler might be worth. At that level, the VEBA’s 55% stake would be worth $5.1 billion. So, basically the VEBA would be denied any serious participation in Chrysler's recovery.
- So instead of looking to make a buck, might the UAW be able to exercise some control over the company for the longer term? Ha, of course not. As I've already pointed out here, the VEBA's 55% stake in the firm would give it just one seat on the nine-member board, the same as the government of Canada, which would have a 2% stake. And, in a particularly lovely touch (quoting the brochure), "the VEBA will be required to vote its Chrysler shares in accordance with the direction of the Independent Directors on Chrysler Board [sic]."
(This is the full post.)