Chrysler Workers Fear The Worst Is Yet To Come
|Topics: Chrysler LLC
February 13, 2007
Anxious Chrysler workers fear the restructuring plan of the automaker could bring the worst. Along with the increasing job cuts and plant closures is the fear of a bleak future.
Steve Laube, 49, is an electrician at DaimlerChrysler AG’s Jefferson North Assembly Plant in Detroit. At present, he wonders if there is still a future in producing vehicles. Laube is so low in the seniority list and so he was laid off last month. Job cuts were triggered by the declining demands for the plant’s vehicles that include Jeep Commander and the Cherokee.
Like any other Chrysler workers, Laube fear the forthcoming restructuring announcement from the automaker. Analysts earlier said that the restructure could cost some 10,000 production workers their jobs. “We hear they’re going to call it the Valentine’s Day massacre,” Laube said as he and other laid-off workers prepare for “jobs bank” duty.
Laube has heard all the rumors surrounding their situation. According to predictions made earlier, two Chrysler plants will cease its operation and buyouts or early retirement package similar to those of Ford Motor Co. and General Motors Corp will be also offering the same. “They don’t clue us into anything,” Laube said. “You just hear rumors, rumors, rumors.”
Analysts in the industry predict another 1,000 to 1,500 salaried workers could lose their jobs when Chrysler Group decides to unite its domestic rivals to reduce factory capacity to match low demand for vehicles.
Most of the job cuts will affect truck plants. This impending dilemma is brought by the shift of the auto market to small fuel-efficient cars. Chrysler lost $1.5 billion in the third quarter of the previous year. The company’s sales were down by seven percent in 2006.
Chrysler’s trucks and large sport utility vehicles account for about 70 percent of the company’s American sales. The said figure is significantly more than any other automaker.
Kevin Reale, an industry analyst for AMR Research Inc., said the automaker probably has 15 percent too much manufacturing capacity and they have to step on the brakes to slow it down. “They’ll have to trim out some assembly facilities to bring their capacity to produce vehicles in line with demand,” he said.
Other analysts added that the Mack Avenue Engine Plant 1 in Detroit, with about 530 employees, has a possibility to entertain plant closure because it makes the 4.7-liter V-8 engines that are mated to slow-selling trucks.
Also anticipated in GM’s plant closure plan is the 2,100-worker plant in Newark, Delaware. The said plant is responsible for the manufacture of the Dodge Durango and the Chrysler Aspen. These vehicles failed to satisfy the expectations of the automaker.
Erich Merkle, an industry analyst at IRN Inc. in Grand Rapids, said a 2,330-worker plant near St. Louis in Fenton, Mo., that makes Ram pickups also is on his list because Chrysler has two other plants that make the Ram.
Chrysler declined to give further details regarding which plants are on the blocks. It added that information involving the same will be released with the company’s earnings for the previous year.
Catherine Madden, an auto industry analyst at the consulting company Global Insight Inc., said, “The most vulnerable are plants that make the mid-sized SUVs, which have fallen out of favor with buyers. Chrysler was very traditional on where they were in truck segments, a single platform with a single model with it. It’s just not competitive from a manufacturing perspective.”
Robbyn Taylor-Higgs, 50, a 27-year veteran of the Newark plant, is aware of the forthcoming closures. With the Durango sales down by about 39 percent, closing is deemed just around the corner.
“We’re all on pins and needles right now,” Taylor-Higgs said. “It is scary. Something always comes up to save us, but I think this time it’s different. With the Germans owning us now, I don’t think the American spirit is behind us.”
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