Shortly after Chrysler LLC confirmed UAW ratification of labour agreement, the third largest American carmaker announced that it will proceed to a reduction of 8,500-10,000 additional hourly jobs through 2008. Chrysler LLC also revealed plans to eliminate hourly and salaried overtime and reduce purchased services due to reduction in volume.Speaking of volume, Chrysler LLC said that it will cancel four models through 2008: Dodge Magnum, the convertible version (only) of Chrysler PT Cruiser, Chrysler Pacifica and Chrysler Crossfire. On the other hand, the American automaker will add two new products in its 2008 line-up, the Dodge Journey and Dodge Challenger, along with two new hybrid versions of the Chrysler Aspen and Dodge
Press Release - Chrysler Announces New Plans to Balance Supply and Demand
- Chrysler Announces Product and Plant Changes
- Industry-wide volume reduction and sales slow down requires plant adjustments
- Four products will be cancelled from Chrysler line-up; while adding two all-new products and two hybrid models
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 (
"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
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
"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
Drop second-shift operations at its Jefferson North (
Drop third-shift operations at the
Drop third-shift operations at
Drop second shift operations at
In addition,
"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."
