- The Washington Times - Wednesday, February 14, 2007

AUBURN HILLS, Mich.

or 13,000 Chrys-ler workers, Feb. 14 will be known as the Valentine’s Day massacre.

Yesterday, Chrysler announced its long-awaited restructuring, including a 16 percent reduction in its work force, shift reductions, a plant closing and a surprise hint that the plan could lead to a DaimlerChrysler divorce.

The Chrysler plan calls for closing the company’s Newark, Del., assembly plant, and reducing shifts at plants in Warren, Mich., and St. Louis. A parts-distribution center near Cleveland also will be closed, and reductions could occur at other plants that make components for those facilities.

The Delaware plant, which makes the slow-selling Dodge Durango and Chrysler Aspen midsized sport utility vehicles, employs about 2,100 workers. Chrysler plans to close it in 2009, with a shift reduction this year.

The Warren truck plant, with 3,313 hourly employees, makes the Dodge Ram and Dakota pickups, which saw sales decline last year. Chrysler plans to eliminate a shift there this year.

The other plant to lose a shift is the St. Louis South assembly plant, which makes Chrysler and Dodge minivans. It has 2,850 workers and will lose the shift in 2008.

Chrysler blamed the wrenching restructuring on poor sales after a shift in consumer taste from SUVs and trucks to more fuel-efficient vehicles. Workers blamed management.

“It’s a shame that Chrysler didn’t give us something better. That’s not our fault,” said Victor Harris, 56, who works in the paint shop at the Newark plant and has been employed there for 35 years.

Aside from the job cuts, Chrysler’s German parent, DaimlerChrysler AG, said it is looking at all options to revive its fortunes, including partners for the troubled Chrysler. Its chairman wouldn’t rule out a potential sale of the U.S. operation.

With Chrysler’s job losses, the domestic auto industry has eliminated or proposed cutting 132,000 manufacturing jobs at 64 U.S. plants since May 2005, said Sean McAlinden, chief economist and vice president of research at the nonprofit Center for Automotive Research in Ann Arbor.

The devastation was partially offset by foreign brands expanding their manufacturing operations in the United States. During that same period, foreign brands such as Toyota Motor Corp. and their suppliers have created 30,000 to 40,000 factory jobs in the United States. That should rise to 50,000 to 60,000 by 2009, Mr. McAlinden said.

Chrysler announced its plan at its Auburn Hills headquarters, saying it hoped the move would return its U.S. operations to profitability by next year. Like the other domestic automakers — Ford Motor Co. and General Motors Corp. — DaimlerChrysler’s earnings have been hit hard by rising labor costs and slumping sales as consumers have turned to foreign models.

For years, the so-called Big Three pinned their fortunes on higher-priced sport utility vehicles and trucks, but that strategy soured when gas prices climbed to near $3 a gallon.

Under the Chrysler plan, 11,000 production workers — 9,000 in the United States and 2,000 in Canada — will lose their jobs over the next three years, and 2,000 salaried jobs also will be cut — 1,000 this year and 1,000 in 2008.

“We believe that this represents a solid plan to return to profitability and lay the groundwork for a solid future,” Chrysler Chief Executive Officer Tom LaSorda said.

DaimlerChrysler Chairman Dieter Zetsche, asked repeatedly about a potential sale or partners for Chrysler, refused to comment.

Jeremy Anwyl, president of the Edmunds.com automotive information Web site, said potential buyers for Chrysler would be limited because of the price tag.

He speculated that the company would be attractive to a Chinese automaker because it has a dealership network that could distribute Chinese-built cars in the United States. Chrysler Group and China’s Chery Automobile Co. late last year agreed on a plan for the Chinese manufacturer to build small cars to be sold worldwide.

Nissan Motor Co. and Renault SA also could be suitors because Chrysler is strong in products such as minivans and trucks where Nissan is relatively weak, Mr. Anwyl said.

Gerald Meyers, a former auto executive who teaches at the University of Michigan, said DaimlerChrysler’s work to develop and integrate common vehicle platforms and components suggest that a divorce would be unlikely.

“Once you’ve scrambled those eggs, it’s really murder trying to separate them. I think Zetsche’s decided to tough it out and try to make his plan work,” Mr. Meyers said.

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