Chrysler to Cut Up to 10,000 Hourly Jobs:Cut Four Models and Add Two Hybrids
02 November 2007
Chrysler LLC announced that it will cut 8,500-10,000 additional hourly jobs through 2008 and reduce salaried employees by 1,000 and supplemental (contract) employment by 37%. The Company also plans to eliminate hourly and salaried overtime and reduce purchased services due to reduction in volume. The announced actions exceed earlier reports of tightening. (Earlier post.)
The volume-related actions are in addition to 13,000 jobs eliminated by the three-year Recovery and Transformation Plan (RTP) announced in February. The objectives of the RTP remain the same.
The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint. Annual industry volume (US market) then was running at a 17.2 million clip. Now, we expect a seasonally adjusted annual volume for 2007 to be significantly lower and carry over into 2008.
—Bob Nardelli, Chairman and Chief Executive Officer
In contract negotiations just concluded with the United Auto Workers, Chrysler committed to spending more than $15 billion on products, plants and engineering during the life of the contract through 2011.
The company announced that it will eliminate four models through 2008, including Dodge Magnum, the convertible version (only) of Chrysler PT Cruiser, Chrysler Pacifica and Chrysler Crossfire. In the same time frame, Chrysler will add two all-new products to its portfolio: the Dodge Journey and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango.
Chrysler will eliminate shifts at five assembly plants, and take further volume-related actions at several other facilities. It will:
Drop third-shift operations at Belvidere (Ill.) Assembly Plant in the first quarter 2008. Belvidere builds the Dodge Caliber, Jeep Patriot and Jeep Compass.
Drop second-shift operations at its Jefferson North (Detroit, Michigan) Assembly Plant in the first quarter 2008. Chrysler currently expects that the plant will return to two shifts in first quarter 2010 with the introduction of the next generation of sport-utility vehicles. The addition of a third shift will remain an option, depending on market demand. Jefferson North builds the Jeep Grand Cherokee and Jeep Commander.
Drop third-shift operations at the Toledo (Ohio) North Assembly Plant in the first quarter 2008. Toledo North builds the Jeep Liberty and Dodge Nitro.
Drop third-shift operations at Brampton (Ontario) Assembly Plant in first quarter 2008. Brampton will build the Chrysler 300, Dodge Charger and Dodge Challenger. The Dodge Magnum will be discontinued.
Drop second shift operations at Sterling Heights (Mich.) Assembly Plant in first quarter 2008. Sterling Heights builds the Dodge Avenger and Chrysler Sebring sedans and Chrysler Sebring Convertible.
Wow, they really are making changes. Too bad about the Crossfire, but not surprising. As for the Pacifica - good riddance. The 300 would make a good hybrid candidate.
Posted by: Elliot | 02 November 2007 at 06:57 AM
The evolution in the auto industry continues to move toward HEVs and BEVs. Microcomputer controlled mechanical engine systems, drive lines and rust-prone iron bodies are reaching their peaks with the introduction of 500hp ICE powered, 2 ton sports sedans.
All this will give way to carbon fiber, aluminum, and microcomputer controlled plug-in battery systems.
If you want performance, it's amazing what a 2600lb, carbon fiber sports car with a 75 lb electric motor can do. Tesla has opened the gates for the others to follow. The question becomes: Will they take the risk? The signs are encouraging that Chrysler has a plan to do so.
Some auto makers have bought into the idea of using diesel power in the U.S.. To now introduce diesel ICE cars back into the market is a step off the path of real efficiency and can only serve as a interim solution until battery technology catches up to the demand of a light-weight, long-life, quick-charge, long-range battery pack.
Chrysler is late to the party; however, without the drag of being a public company, they should be able to catch up quickly. And, good luck to them!
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Posted by: Robert Montgomery | 05 November 2007 at 01:40 PM