Union Cracks in DaimlerChrysler Deal

"Cerberus will look for the same concessions now that Ford and GM have gotten, and the union will make them," says George Magliano, director of automotive research with Global Insight. "They know they have to work with those people. Detroit is fighting for its life, and the UAW is fighting for its life. This means they're going to have to work together."

Meanwhile, the industry will be looking for further cost cuts in negotiations over its master labor contracts with the UAW, which are scheduled to take place this fall. Currently, U.S.-based automakers are bleeding market share to foreign-based manufacturers, like Toyota (TM Quote) and Honda (HMC Quote), which enjoy a lower-cost business model with respect to hourly workers and pension and health care obligations.

On a conference call on Monday, Zetsche said the deal with Cerberus is "not conditional on any aspects of a collective bargaining agreement."

The Associated Press reported that Canadian Auto Workers President Buzz Hargrove said he was assured that the collective bargaining agreement with Chrysler would be honored by Cerberus and that no jobs would be eliminated as a result of the deal.

Hargrove also told The New York Times that he was "not at all comfortable" with Cerberus as a buyer for Chrysler.

"The history of private equity has been to buy, then slash and burn a lot of jobs, and then get out with a lot of money for a handful of people," said Hargove, according to the Times.