Cerberus Misled Union on Chrysler Aims, Hargrove Says (Update2)

[Omaha Steve]

http://www.bloomberg.com/apps/news?pid=20601082&sid=auH8YG9BXC1E&refer=canada

By Greg Bensinger

March 26 (Bloomberg) -- Cerberus Capital Management LP misled the Canadian Auto Workers about plans to boost Chrysler LLC's North American market share and retain jobs when it sought support to buy the automaker, the union's president said.

Cerberus Chairman Stephen Feinberg told the CAW ``that they weren't going to slice and dice and sell,'' Buzz Hargrove said in an interview. ``He's trying to cut his way to profitability, as opposed to grow the business.''

Since Cerberus took control in August, Auburn Hills, Michigan-based Chrysler has pared four models and sought to trim more than 12,000 workers as the North American auto market deteriorated. Chrysler said last week it may need to reduce its sport-utility vehicle offerings by half.

``That's great for Cerberus, but it's not great for workers, because a lot of people are going to lose their jobs and a lot have lost their jobs,'' Hargrove said today in New York.

Hargrove said he was persuaded to throw his support behind the bid for the automaker because of Cerberus's assurances during the negotiations with Chrysler's former parent, DaimlerChrysler AG, known now as Daimler AG.

``We were misled,'' Hargrove said. Feinberg ``has never met with us since then to explain the shift in thinking.''

FULL story at link.