Chrysler announces massive cuts; Exec muses corporate split

AUBURN HILLS, Mich. — North America’s largest car and truck maker says 13,000 Chrysler workers will lose their jobs over the next three years, including 2,000 in Canada.

The painful restructuring plan announced by DaimlerChrysler also calls for plant closures in Newark, Del. and Cleveland as well as reduced shifts in Ontario, Michigan, and Missouri. Reductions and perhaps closures are also likely at related component suppliers.

The Canadian job cuts — 1,000 this year and 1,000 in 2008 — will occur at the company’s Windsor, Ont. and Brampton, Ont. plants. The Brampton facility, however, is expected to take on the new Dodge Challenger, which should allow it to maintain three shifts.

In total, the German-American vehicle producer will reduce its North American workforce by 16 percent.

Chrysler is the latest of the beleaguered Big Three North American vehicle makers to respond to the continuing auto market downturn with massive job cuts and other cost saving strategies.

Chrysler says it hopes to get things back on track by
’09. In the meantime about 17,000 NA jobs will be lost

Last year, both Ford and GM announced closures and layoffs. The latter company said it would close 12 plants by 2008, affecting 30,000 jobs, including nearly 4,000 in Oshawa, Ont.

According to Reuters news agency and other media, DaimlerChrysler AG said it was considering “far-reaching strategic options with partners” for Chrysler. Chairperson Dieter Zetsche did not give details on what the company plans for the U.S. division, but reportedly did not rule out a potential split of the two companies, which merged in 1998.

Analysts quoted by Reuters speculated that the statement is an indication the company is mulling over a possible divorce, with DaimlerChrysler looking to partner with a new company or even sell the Chrysler unit.
Meanwhile, Canadian Auto Workers President Buzz Hargrove yesterday called the move “an absolute disaster.”

He blamed the cuts on “unfair trade practices” that prevent North American automakers from exporting to Asia, while thousands of Japanese vehicles are exported and built in Canada.

While all of the major U.S.-based automakers are cutting jobs and production, Toyota and Honda have expanded plants and built several new ones in southern Ontario. Toyota also recently opened a medium-duty Hino truck plant in Woodstock.

The CAW and DaimlerChrysler Canada have an agreement in principle to extend buyout packages to workers in the wake of the announced reductions.
According to Reuters, the program will mirror a deal the union reached with Ford earlier this year. In that program workers eligible to retire received about CND$70,000, plus a $30,000 vehicle voucher; while others would get anywhere between $50,000 and $100,000.

— with files from Reuters