January 11

13,000 Chrysler workers lose jobs

first_imgAUBURN HILLS, Mich. – For 13,000 Chrysler workers, Feb. 14 will now be known as the Valentine’s Day massacre. On Wednesday, Chrysler announced its long-awaited restructuring, which included 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. “We believe that this represents a solid plan to return to profitability and lay the groundwork for a solid future,” Chrysler CEO Tom LaSorda said at a news conference. Under the Chrysler plan, 11,000 production workers – 9,000 in the U.S. 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. “Today’s action by DaimlerChrysler is devastating news for thousands of workers, their families and their communities,” United Auto Workers President Ron Gettelfinger and Vice President General Holiefield said in a joint statement. DaimlerChrysler Chairman Dieter Zetsche, asked repeatedly about a potential sale or partners for Chrysler, refused to comment. “I cannot and will not go into any further detail about the announcement we made today,” he said during a news conference. “In this regard we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler,” Zetsche 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 suggests the 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,” Meyers said. Bank of America analyst Ronald Tadross said he “would not be surprised if there is good interest in Chrysler. We see Chrysler as a decent business, at least relative to the other U.S. domestic manufacturers.” Chrysler said Wednesday that its fourth-quarter earnings plunged on weaker demand at the Chrysler unit, where sales fell 7 percent. DaimlerChrysler’s profit fell to $761 million, or 74 cents per share, as revenue slipped to $53.7 billion. DaimlerChrysler earned $4.26 billion, or $4.17 per share, in 2006 compared with 2005 earnings of $3.76 billion, or $3.70 per share. LaSorda said the company expects to lose money again in 2007, but less on an operating basis than in 2006. He also said the company expects to take a $1.3 billion charge this year for restructuring expenses. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! 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 possible 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, Mich. The devastation was partially offset by foreign brands expanding their manufacturing operations in the U.S. During that same period, foreign brands, such as Japan’s Toyota Motor Corp., and their suppliers have created 30,000 to 40,000 factory jobs in the U.S. That should rise to 50,000 to 60,000 by 2009, McAlinden said. last_img read more