One year ago, Detroit was abuzz with talk that Ford Motor Co. might be the next American icon to go private. It already had put its luxury brands on the block, and its $15.4 billion market cap was well within the reach of buyout firms that still had ready access to cheap debt.
But turnaround legend Wilbur Ross wanted no part of it, despite having made big bets in the auto parts space with companies like Collins & Aikman Europe. His first concern was about adding more debt to an already leverage-laden company, but his second one was more salient today — given that thousands of Chrysler workers just walked off the job:
“The UAW contract comes up for renewal next year,” Ross told me. “And you don’t know what it’s going to look like, because it’s done by ‘pattern negotiation’ with the Big Three. What would you base [labor] cost projections on?”
I’m sure that’s a question that many Cerberus executives are asking themselves today, as they watch news footage of Chrysler workers trade in the assembly line for the picket line.
Update: Strike over. Wow, that was fast.