The sale of Chrysler to Cerberus and what this will mean for the company and the future of its three brands has become the subject of much speculation. Aside from the rumours that a banking syndicate has made $60 billion available for future Cerberus investments, of which $50 billion will be needed to refinance Chrysler Financial Services, the change of ownership is yet another opportunity for negotiation between the company and its labour unions.

Tom LaSorda, CEO, has already mapped out the challenges ahead, starting with September’s UAW negotiations, calling for big pension and health care concessions from the union. Now LaSorda, and Cerberus, really can call the shots. With no direct shareholders and massive funds, they can ride out any strike – where DaimlerChrysler would not (or even could not afford to) close plants for any length of time. That said, LaSorda himself is likely to become a shareholder; companies like Cerberus do like their managers to be ‘enfranchised’ – to have ‘a bit of their own skin’ in the company.

Ironic that LaSorda’s father, Frank, was the CAW President of Chrysler’s Windsor, Ontario, minivan plant. And his grandfather, Harry Rooney, nearly went to prison for organising a 122-day strike at Chrysler in 1946.

All this comes at a time when many industry leaders are citing OEMs’ increased flexibility as negating the need for contract manufacturing – perhaps one of the reasons behind Magna’s reluctance to help outbid Cerberus. While Magna speaks (as it has done for several years) of establishing vehicle manufacturing facilities in North America, maybe its recognition of the contract manufacturer’s dwindling role will see it move into different markets?

In May this year, Russian conglomerate Basic Element took a $1.54 billion stake in Magna through the purchase of 20 million shares. This might open up considerable potential for Magna in Russia, where there is accelerating vehicle demand and growing investment by global OEMs. With BMW pulling X3, the supplier may develop in Graz and manufacture abroad. As they say, watch this space.