UPDATE - Finally
Breaking News from The Globe and Mail
New car may not save shift at Chrysler
GREG KEENAN
Monday, February 05, 2007
The Chrysler Group is expected to dole out a gift to its Canadian operations next week, but may couple it with grim news in a restructuring plan for its North American operations that could wipe out as many as 10,000 jobs.
The unit of DaimlerChrysler AG is expected to announce that its Brampton, Ont., plant will build the Dodge Challenger muscle car — but that may not be enough to maintain the third shift of production at the plant, sources said Monday.
The Challenger will come on stream in April, 2008, the sources said, but its small volume of about 30,000 vehicles a year is not enough to offset a slump in demand for the Chrysler 300, Dodge Charger and Dodge Magnum made in Brampton.
“They could probably get away with two shifts right now,” said one source familiar with the Brampton plant, which employs about 4,200 people. Eliminating the third shift would wipe out about 900 jobs.
That was the biggest worry of Canadian Auto Workers union president Buzz Hargrove Monday, as he prepared for a meeting in Toronto on Tuesday with Chrysler executive vice-president of manufacturing Frank Ewasyshyn and vice-president of union relations Ken McCarter.
The Brampton plant has been shut for three weeks already this year and there is another one-week layoff scheduled in March.
“If that doesn't turn around, it's hard to imagine them keeping the third shift on,” Mr. Hargrove said Monday.
Chrysler is expected to reduce its 83,000-person North American work force by 10,000 people, close at least two plants and more closely integrate its operations with Mercedes-Benz as part of a plan to be unveiled on Feb. 14 by president Tom LaSorda and DaimlerChrysler chairman Dieter Zetsche, industry analysts and media reports said Monday.
DaimlerChrysler Canada Inc. spokesman Stuart Schorr would not comment.
“We have to wait for Mr. LaSorda to discuss the restructuring on the 14th,” Mr. Schorr said.
The actions come after a third-quarter operating loss of $1.5-billion (U.S.) at Chrysler and an expected loss of about $1-billion for all of 2006. Chrysler is facing the same woes as Detroit-based rivals Ford Motor Co. and General Motors Corp., which have already announced job cuts and plant closings in the face of years of market share decline and the swift and unexpected drop last year in sales of full-size pickup trucks and sport utility vehicles.
Several industry analysts and sources said Chrysler's sport utility vehicle plant in Newark, Del., will be shut, along with components plants elsewhere in the U.S.
Some observers expect output of full-sized pickup trucks to be slimmed down to two plants from three, because two of them are operating at less than full capacity.
“This is a company under immense pressure and one that has to shrink,” said long-time industry analyst John Casesa, managing partner of Casesa Shapiro Group in New York.
A Toronto components factory that puts together pistons for engines may also be on the hit list, but Mr. Hargrove said the current contract prevents the company from closing it until 2008. About 450 people are employed there.
During the Chrysler restructuring of 2001, the company eliminated the third shift in Brampton, but restored it in 2005 when its new mid-sized cars became a success.
The 5,500 jobs at the Windsor assembly plant are expected to be safe because Chrysler is retooling it to build a redesigned version of its minivans, which the company expects to succeed in part because Ford and GM are getting out of the minivan market.
More critical question involve the degree of integration between Chrysler and Mercedes, such as whether one platform will be used for both a Chrysler vehicle and a Mercedes vehicle.
“This is the decision,” one industry source said. If Chrysler and Mercedes become more deep