Paladin06

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

sirmagnum

Mixed feeling on this news - I hate to see this many people lose good jobs. But, I am glad to see some confirming news about the Challenger. What do you think the run number may mean -- 30,000 cars per year, can we read anything into that relative to models and options?

Paladin06

I think there will be few options available outside of what comes off the line and the price will not be affordable for many..

purnrg

I think it is safe to assume that the bulk first year of production will be V8 cars with V6 cars coming on later if the demand warrants it.
This is pretty much what DCX has said all along.

Paladin06

Not that it means anything but the DCX guy I'm talking with has there will be no V6, not in 2008 anyway. They are not even testing one.

purnrg

He is probabably right at least not the first quarter.

awsure

That's only 600 cars per state. You really think that small a number is realistic?

Jeremiah 29:11

Well, I remember us having the discussion that it would be only 30K cars in the first year and it looks like this is a true observation.

awsure

I am guessing that pricing speculation will really heat up if those numbers are confirmed. Poking around for Charger SRT pricing and they are mid $40's. Gotta think we are looking at over $50k for a 6.1L if 30,000 units is correct. Anyone want to weigh in?

Jeremiah 29:11

Yes, I agree based on the current information.