LEXINGTON, KY – United Auto Workers President Ron Gettelfinger says the union is not opposed to private-equity ownership in the auto industry, as long as the new owners don’t adopt a “strip-and-flip” strategy.

“They come in the door and say, ‘We’re here for the long term,’” Gettelfinger says at the Global Automotive Conference here. “I found out real quick you better ask them what long term means, because for some, long term is one year. To others it’s three to five, and to others it’s seven.”

The union, however, is a lifetime stakeholder.

“We’re representing workers who want to retire from that facility, and you can’t retire in two, three or five years,” he says. “That’s one of the things that we watch.”

Gettelfinger uses formerly bankrupt supplier Dana Corp. as an example of how private-equity groups can assist a troubled company.

Dana was in bankruptcy, and in its case (private equity) worked perfectly,” he says of the deal that bailed out Dana.

Then there is Delphi Corp.

“I think the people involved in the Delphi bankruptcy were only fighting for pennies, and they let the credit crunch sneak up on them, and all of a sudden Appaloosa Management (LP) came in and bought all of this stock for a quarter a share and watched it jump up,” Gettelfinger says.

“When they went to the closing, they didn’t close, so now they’re debating whether or not they owe $250 million to Delphi,” he says. “So there’s an example where it didn’t work.”

Regarding Cerberus Capital LP’s purchase of the former DaimlerChrysler AG’s Chrysler Group, Gettelfinger says it has largely worked out, calling Cerberus Chairman Steven Feinberg a “great American.”

Gettelfinger, who sat on DaimlerChrysler’s advisory board during the transaction, says he was privy to insider information and had a chance to meet Feinberg.

“Being on the advisory board didn’t mean I had a say who the selected company or bidder was to take over Chrysler,” he says. But it allowed him to investigate Cerberus and get a read on Feinberg, who, Gettelfinger adds, “has got a lot of commitment to this country and our union. I was quick to support Cerberus and their efforts.”

Although Gettelfinger doesn’t necessarily oppose the entry of private equity groups into the automotive arena, he admits they create a sense of “apprehension” among both salaried and hourly workers.

Gettelfinger says the union will evaluate private equities on a case-by-case basis because they vary greatly in the way they operate. In many cases, private equities make a considerable return on their investments, but that return is not always distributed equally, he says.

“The auto business is extremely cyclical and has extremely high fixed costs,” he adds. “And if you put lot of debt on a cyclical business with high fixed cost, that adds a lot of risk. If you’re an investor,you risk your capital going into it, but you get the upside if the investment works.

“If I’m a worker,what happens to me? If it doesn’t work, I’ve lost out. I’ve lost my job,” Gettelfinger says. “And even if it does work, do I as a worker share in the upside? I’m also taking a risk. So we’ve got to bring that piece of it to the bargaining table.”

Meanwhile, he says the ongoing strike at American Axle and Mfg. Holdings Inc. hurts working-class families.

“I think there’s something cruel and inhumane about making families suffer like they are, and that’s what this is about,” Gettelfinger says of the strike that began Feb. 26, affecting thousands of workers at both AAM and plants operated by its customers.

“It’s not about coming in and trying to negotiate a responsible agreement. It’s about coming in and dictating to people what they’re going to work for, and that’s not how this system works.”

Asked if Ford Motor Co. might sweeten the buyout packages recently tendered to hourly workers if there aren’t enough takers, Gettelfinger says it’s “unlikely,” adding he believes the remaining workers will stay put.

Ford says today in its quarterly-earnings release that 4,200 workers have accepted buyouts. And CEO Alan Mulally hints there may be “targeted reductions” to trim the auto maker’s payroll.

bpope@wardsauto.com