Union Cracks in DaimlerChrysler Deal

Updated from 2:16 p.m. EDT

The resignation of the United Auto Workers union to a private-equity takeover of the Chrysler Group is a sign that Detroit's old order is starting to crumble, and the U.S. auto industry is headed for a tough battle with labor in negotiations this fall.

DaimlerChrysler (DCX Quote) agreed over the weekend to sell an 80% stake in its struggling U.S. business to Cerberus Capital Management for $7.4 billion. After unburdening itself of the bulk of Chrysler's losses and its roughly $19 billion in pension and health care liabilities, the German automaker will seek to restore its brand name to just Daimler.

Chrysler will find itself in the clutches of a private-equity maven with a history of buying bloated businesses and then slashing costs and payrolls, shuttering factories and moving production to low-cost labor markets overseas. ...