Chrysler to axe 20% of Canadian work force
Industry's woes deepen as sources say firm will cut 2,000 Canadian jobs
The Chrysler Group will eliminate as many as 2,000 jobs in Canada in a restructuring announcement next week that will deepen the massive job cuts and plant closings that are reshaping the auto industry in North America.
The cuts in Canada represent about 20 per cent of the 10,000 jobs the Chrysler division of DaimlerChrysler AG is wiping out as it undergoes a downsizing similar to those already undertaken by Detroit rivals Ford Motor Co. and General Motors Corp., industry sources said.
The last of the Detroit Three to take an axe to its North American operations will cut jobs in the Ontario cities of Windsor and Brampton as part of a plan to restore profit and reduce capacity.
Chrysler employs about 11,500 people at those plants, its Etobicoke Casting Plant in Toronto and a head office in Windsor that overlooks the Detroit River and the Motor City.
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Daimler Chrysler’s Brampton, Ont., assembly plant. (Fred Lum/The Globe and Mail)
Chrysler Group has refrained from discussing the plan, which is scheduled to be presented by its Canadian-born chief executive officer, Tom LaSorda. Mr. LaSorda grew up four blocks from the Windsor Assembly Plant and is the son of a former head of the union local at the plant.
It's not clear precisely where the Canadian cuts will be made, but industry sources said they likely will be a combination of reductions in vehicle output at the two assembly plants, closing or further downsizing of the Etobicoke plant, contracting out of jobs now done by unionized employees at DaimlerChrysler Canada Inc. and cuts in the salaried ranks. Chrysler has about 1,500 salaried employees in Canada.
About 5,500 people assemble Caravan and Town and Country minivans and Pacifica crossover utility vehicles in Windsor. Another 4,200 Canadian Auto Workers union members put together Chrysler 300 and Dodge Magnum and Charger cars in Brampton. About 450 people work at the Etobicoke plant making pistons and other engine components for various Chrysler engine plants in the United States.
There are about 280 CAW members in the firm's transportation unit, which is expected to be outsourced.
CAW officials who attended a meeting with two senior Chrysler executives earlier in the week refused yesterday to give any details of what they were told about the plan.
Buzz Hargrove, CAW president, said after the meeting on Tuesday that the information Chrysler provided about the cuts was worse than he had anticipated, but he would not provide details.
The moves by Chrysler follow those by Ford and GM, which are shutting dozens of factories and shedding tens of thousands of jobs as they adjust to years of declining market share and soaring health-care and other costs.
Chrysler is expected to shut its Newark, Del., and St. Louis North plants permanently, close an engine plant in Detroit, and sell or close components plants in the Detroit area as well as cut salaried jobs at head office in Auburn Hills, Mich., said Sean McAlinden of the Center for Automotive Research in Ann Arbor, Mich.
The smallest of the Detroit Three appeared to be healthiest until it got sideswiped last year when a sudden and steep rise in U.S. gas prices sent sales of sport utility vehicles and full-sized pickup trucks skidding. Those vehicles represent almost three-quarters of its sales.
The company needs to better integrate its operations with those of sister company Mercedes-Benz and develop some successful cars to reduce its dependence on mid-sized SUVs, Mr. McAlinden said.
“That market in 2010 will be zero,” Mr. McAlinden said. “Everybody's running from that market.”
Sales of the Durango mid-sized SUV, one of two models made at the Newark plant, plunged 39 per cent last year in the U.S. market. U.S. sales of the cars made in Brampton rose 23 per cent, while minivan sales fell 9 per cent.
Chrysler's two Canadian plants produced 606,000 vehicles last year, or about 25 per cent of the 2.5 million vehicles the auto maker cranked out in North America.
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