MTU works council asks Berlin to block Carlyle deal
STUTTGART -- The works council at DaimlerChrysler heavy diesel unit MTU Friedrichshafen has asked German Chancellor Gerhard Schroeder to help block the unit's potential sale to U.S. financial investor the Carlyle Group.
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"We fear that a financial investor like Carlyle is not interested in the company for the long term," a works council spokesman said on Tuesday, raising questions about the future of 6,700 jobs at the business.
A letter sent to Schroeder asked him to intervene with MTU's owners and use an election campaign appearance on Friday in the southern German city of Friedrichshafen to address the issue.
Schroeder's office in Berlin confirmed it had received the letter and said the chancellor would respond shortly.
Stuttgart-based Daimler has been trying to sell the unit, in which it holds 88 percent, for several months.
The German Zeppelin and Maybach families, who own 12 percent of MTU, have veto rights over any deal and have reached an exclusivity agreement with private equity investor Carlyle.
The works council notes in the letter that MTU Friedrichshafen makes engines for tanks and ships, which qualifies it as a defense company for which special takeover rules apply.
MTU and DaimlerChrysler declined comment.
Sources familiar with the situation told Reuters on Tuesday that Daimler planned a shareholder meeting for Sept. 1 to restructure MTU's operations by liquidating MTU and handing over the assets to a new business structure.
It had the 75 percent of the votes needed to make such a move, but family members have threatened to file suit to prevent such a transaction, according to media reports.
