Chrysler layoffs loom - Temporary shutdowns through winter
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| DICK LOEK/TORONTO STAR FILE PHOTO |
| The Canadian Auto Workers said 3,700 workers will be on layoff when Chryslers Brampton plant shuts for two weeks in November. |
LaSorda denies permanent closings
Sep. 20, 2006. 07:01 AM |TONY VAN ALPHEN |BUSINESS REPORTER - -DaimlerChrysler is cutting production in Canada and the United States because it can't sell enough gas-guzzling vehicles — even with incentives.
The slumping auto giant said yesterday its models, particularly pickups and sport-utility vehicles, are piling up at dealer lots so it must reduce shipments and production.Tom LaSorda, chief executive officer for the Chrysler Group, acknowledged the company had already waited too long to curb output, which will affect some assembly plants and thousands of workers.
He also said the company will move aggressively to align output with demand in efforts to curb mounting losses."We're going to look at the total business," LaSorda told reporters during a conference call. That raises the spectre of shift losses and possible permanent closings next year, but LaSorda said there were no current plans for such action.
The company said it had cut shipments by 90,000 vehicles in the third quarter and would trim another 45,000 in the fourth quarter, leaving it 16 per cent lower than a previous second-half target of 840,000 vehicle deliveries in North America.
Business plunged in the U.S. this summer despite heavy discounting and other incentives.LaSorda would not identify plants that face temporary shutdowns, but the Canadian Auto Workers confirmed about 3,700 employees will be on layoff when the company halts production at the Brampton assembly plant during the weeks of Nov. 13 and Nov. 20.
Leon Rideout, the union's plant chairperson, added the company has tentatively scheduled further temporary stoppages for the weeks of Jan. 29, Feb. 5 and March 12.The moves mark the first time the Brampton plant has cut output since it started building the popular Chrysler 300 in January 2004. The plant also assembles the Dodge Magnum wagon and Charger sports car.All three models are gas guzzlers which have been declining in popularity this year because of soaring prices at the pumps.
"We're still good for now, but sure, it is a little worrisome," Rideout said in an interview. Rideout said DaimlerChrysler would not be able to cut a shift at the Brampton plant because of provisions in its contract with the union that does not expire until fall 2008.
Furthermore, sources say DaimlerChrysler will start building the Challenger sports car in Brampton in 2008 to replace volume created by softer demand for existing models.In Windsor, Ken Lewenza, president of CAW Local 444, said the company is idling its minivan assembly complex, which employs about 4,900, during the weeks of Oct. 16 and Dec. 18.
Workers on temporary layoffs at both plants would receive about 65 per cent of their regular gross pay through a combination of supplementary employment benefits from the company and federal employment insurance. "I think it's horrible any time you take production out," Lewenza said. "It shows the economy is softening, particularly in the U.S. It makes me nervous.
"Last week, Chrysler Group said its third-quarter loss would soar to $1.52 billion (U.S.) — more than double previous forecasts.
LaSorda, a native of Windsor, told reporters the company's line-up is moving more toward four-cylinder and fuel-efficient models such as the Dodge Caliber compact and Jeep Compass sport-utility vehicle, which should help sales.
He said soaring gas prices triggered a significant shift by consumers this summer that adversely affected Chrysler's line-up of pickup and sport-utility vehicles.He also said Chrysler is stillseriously looking at producing a small car, and hinted details would emerge in the next few months.
The slumping auto giant said yesterday its models, particularly pickups and sport-utility vehicles, are piling up at dealer lots so it must reduce shipments and production.Tom LaSorda, chief executive officer for the Chrysler Group, acknowledged the company had already waited too long to curb output, which will affect some assembly plants and thousands of workers.
He also said the company will move aggressively to align output with demand in efforts to curb mounting losses."We're going to look at the total business," LaSorda told reporters during a conference call. That raises the spectre of shift losses and possible permanent closings next year, but LaSorda said there were no current plans for such action.
The company said it had cut shipments by 90,000 vehicles in the third quarter and would trim another 45,000 in the fourth quarter, leaving it 16 per cent lower than a previous second-half target of 840,000 vehicle deliveries in North America.
Business plunged in the U.S. this summer despite heavy discounting and other incentives.LaSorda would not identify plants that face temporary shutdowns, but the Canadian Auto Workers confirmed about 3,700 employees will be on layoff when the company halts production at the Brampton assembly plant during the weeks of Nov. 13 and Nov. 20.
Leon Rideout, the union's plant chairperson, added the company has tentatively scheduled further temporary stoppages for the weeks of Jan. 29, Feb. 5 and March 12.The moves mark the first time the Brampton plant has cut output since it started building the popular Chrysler 300 in January 2004. The plant also assembles the Dodge Magnum wagon and Charger sports car.All three models are gas guzzlers which have been declining in popularity this year because of soaring prices at the pumps.
"We're still good for now, but sure, it is a little worrisome," Rideout said in an interview. Rideout said DaimlerChrysler would not be able to cut a shift at the Brampton plant because of provisions in its contract with the union that does not expire until fall 2008.
Furthermore, sources say DaimlerChrysler will start building the Challenger sports car in Brampton in 2008 to replace volume created by softer demand for existing models.In Windsor, Ken Lewenza, president of CAW Local 444, said the company is idling its minivan assembly complex, which employs about 4,900, during the weeks of Oct. 16 and Dec. 18.
Workers on temporary layoffs at both plants would receive about 65 per cent of their regular gross pay through a combination of supplementary employment benefits from the company and federal employment insurance. "I think it's horrible any time you take production out," Lewenza said. "It shows the economy is softening, particularly in the U.S. It makes me nervous.
"Last week, Chrysler Group said its third-quarter loss would soar to $1.52 billion (U.S.) — more than double previous forecasts.
LaSorda, a native of Windsor, told reporters the company's line-up is moving more toward four-cylinder and fuel-efficient models such as the Dodge Caliber compact and Jeep Compass sport-utility vehicle, which should help sales.
He said soaring gas prices triggered a significant shift by consumers this summer that adversely affected Chrysler's line-up of pickup and sport-utility vehicles.He also said Chrysler is stillseriously looking at producing a small car, and hinted details would emerge in the next few months.
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9/20/2006 07:14:00 AM
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