Union Cracks in DaimlerChrysler Deal

Cerberus Chairman John Snow, a former U.S. treasury secretary, said on WJR-AM in Detroit that the UAW's role at Chrysler will be "respected and honored." At a news conference in Germany, Snow said his firm would invest in Chrysler for long-term growth and allow it to rebound without being hindered by the short-term focus of the public financial markets.

"We think at this particular point in Chrysler's history, there may be opportunities in the private world, the world of private investment, that create more room for growth and expansion, that allow management to focus with greater intensity on the day-to-day business of producing better cars," Snow said.

For its part, Cerberus has been quietly amassing an arsenal of assets in the auto industry. Most notably, the firm acquired a majority stake in General Motors' finance arm, GMAC, and it also owns stakes in Tower Automotive and two rental-car companies, Alamo and National.

Analysts say that the firm may seek to join Chrysler's finance business with GMAC to build a giant auto-loan company. Also, there are opportunities to grow Chrysler's brands, which include Jeep and Dodge, in emerging markets like China and India.

In December, Cerberus was part of a consortium of investors that agreed to invest $3.4 billion in Delphi, GM's chief auto-parts supplier and former subsidiary that is currently locked in bankruptcy negotiations with the UAW over cost reductions. Ultimately, the firm backed out of the deal after the UAW refused to make concessions in labor costs for the company.