Chrysler cuts four models & five shifts

MotorCity · 11-01-07, 10:16

Cerberus is really going to shake things up!!

I know people that work for Chrysler LLC and two weeks ago they were all gathered in a coneference room and shown a video with the Cerberus head honcho's" telling them where they plan to go, how they plan to get there etc, etc. After each part of the video they would pass around a questionare and ask questions like "what can you do to halp us realize this target".. Basically a "justify your job" pow wow...NOT FUN!!

Bradford Wernle
Automotive News
November 1, 2007 - 10:20 am ET

DETROIT -- Chrysler LLC, ending days of speculation, said today it will slash 8,500-10,000 hourly jobs before the end of 2008 and cut four vehicles from its lineup as it restructures under the ownership of Cerberus Capital Management LP.

Another 1,000 salaried jobs also are being cut along with about 37 percent of its contractors, the company said. Chrysler will also eliminate hourly and salaried overtime.

Chrysler will drop shifts at Belvidere (Ill.) Assembly, Jefferson North in Detroit, Toledo North, Brampton (Ont.) Assembly, Sterling Heights (Mich.) and Mack Avenue Engine Plant II in Detroit.

Chrysler will cut the Dodge Magnum, the Chrysler PT Cruiser convertible, the Chrysler Pacifica crossover and the Chrysler Crossfire convertible.

In the same time frame, Chrysler said it will add two all-new products to its portfolio: the Dodge Journey crossover and Dodge Challenger coupe, along with two new hybrid models, the Chrysler Aspen and Dodge Durango SUVs.

“The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint," Chrysler CEO Bob Nardelli said in a prepared statement.

Chrysler LLC today announced that it would make volume-related reductions at several of its North American assembly and powertrain plants, and eliminate four products from its line-up.

Shifts will be eliminated at five North American assembly plants which, combined with other volume-related manufacturing actions, will lead to a reduction of 8,500-10,000 additional hourly jobs through 2008.

Additional actions include reductions of salaried employment by 1,000 and supplemental (contract) employment by 37 percent. The Company also plans to eliminate hourly and salaried overtime and reduce purchased services due to reduction in volume.

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," said Bob Nardelli, Chairman and Chief Executive Officer. "Annual industry volume (U.S. 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."

"We have to move now to adjust the way our company looks and acts to reflect a smaller market," added Tom LaSorda, Vice Chairman and President. "That means a cost base that is right-sized and an appropriate level of plant utilization."

LaSorda added that third-shift operations at assembly plants usually reflect a high demand after a product is launched. Three of the five plants affected by this action are the result of elimination of third shifts" in Belvidere, Illinois; Toledo, Ohio, and Brampton, Ontario.

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.

"These actions reflect our new customer-driven philosophy and allow us to focus our resources on new, more profitable and appealing products," added Jim Press, Vice Chairman and President. "Further, these product actions are all in response to dealer requests."

Manufacturing Actions

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, Mich.) Assembly Plant in the first quarter 2008. It's expected 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.

In addition, Mack Avenue (Detroit) Engine Plant II will return to a traditional two-shift / two-crew operation in the first quarter 2008 after operating on a three-crew, two-shift, 120-hour-per-week (3/2/120) schedule. Mack II builds the 3.7-liter V-6 engine.

"I'm confident that we have the right team in place and a business plan that doesn't need to be re-written," concluded Nardelli. "Like all good plans, the RTP has built-in flexibility that allows us to stay one step ahead of market change. And that is the way to long-term sustained profitability."

Yal · 11-01-07, 12:45

The minute Cerberus took over I would have been looking for a new job, heck I would have been looking the minute Daimler wanted out. This is actually kind of mild compared to what entities like this do when they acquire other companies.

kkreit01 · 11-01-07, 12:57

Surprised about the Magnum. Not surprised about the rest....

TigerMike · 11-01-07, 01:28

Quote:

Originally Posted by kkreit01

Surprised about the Magnum. Not surprised about the rest....

That was my first thought as well. I guess the "hot rod station wagon" craze is over, lol, or it's just not as cool to own a modern day wagon as the hype made it out to be initially. Actually, most of the ones I see running around here are on chrome 22s...lol

RTexasF · 11-01-07, 02:37

Jason,

You sure get the scoop on this kinda stuff. Kinda scary too, eh?

SpoiledMan · 11-01-07, 05:21

I'm not surprised by *any* of the models getting cut. I predicted that the Pacifica would get cut a couple years back. Around here most every one I see has an Enterprise frame on the back.

Scottwax · 11-01-07, 08:45

Quote:

Originally Posted by Yal

The minute Cerberus took over I would have been looking for a new job, heck I would have been looking the minute Daimler wanted out. This is actually kind of mild compared to what entities like this do when they acquire other companies.

Bottom line though, companies have to make money to stay in business. I'm suprised the Pacifica lasted as long as it did.

WilliamHBonney · 11-01-07, 08:49

I really liked the Pacifica. I worked in the auto industry and had a Chrysler VP give me a Pacifica for a week while on vacation in Orland and it was a very solid family car.

SpoiledMan · 11-01-07, 10:01

It's "lost" between a minivan and a crossover or what I call "no mans land" and I guess not many others found a place for it either as the only way they sold was *heavily* discounted.

WilliamHBonney · 11-01-07, 10:12

Quote:

Originally Posted by SpoiledMan

It's "lost" between a minivan and a crossover or what I call "no mans land" and I guess not many others found a place for it either as the only way they sold was *heavily* discounted.

You have no idea how cheap I bought them for my client.

SpoiledMan · 11-01-07, 10:47

You're *so* right but I can imagine.

Yal · 11-02-07, 08:07

The PT Cruiser has been the same car for seven years. Seven years!! It even looks the same, the Ford Focus has been around just as long but at least you would be hard pressed to tell from the outside. Chrysler feeds you the same thing until you get sick and tired of it then they cut it. What ever happened to innovation over there?