Chrysler to lean on Belvidere products to return to profitability
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| New Dodge Calibers sit on the lot Wednesday at the Belvidere assembly plant. Dealing with a 40 percent decline in companywide profit for the fourth quarter, DaimlerChrysler outlined 13,000 job cuts, about 16 percent of the work force. |
Business: Manufacturing
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BELVIDERE — Mayor Fred Brereton was keeping close tabs as news came out Wednesday of cutbacks at DaimlerChrysler.
The news was bleak for many of the automaker’s workers. Company officials announced 13,000 job cuts, mostly in Delaware, Ohio, Michigan and Missouri.
For the Belvidere mayor — and the 3,600 workers at the Chrysler plant here — the news was better.“The two things that interested me were the fact that Chrysler wants to increase its share of the small-car market, and that’s what we build in Belvidere, the (Dodge) Caliber,” Brereton said Wednesday. “They also want to increase its international sales, and again, the Caliber is a big part of that.”
The Belvidere plant puts together the Dodge Caliber, Jeep Compass and Jeep Patriot. The company invested $419 million in the plant in late 2005 and early 2006 to make it the most flexible of all of its North American operations.
The Chrysler unit of the German-American automaker announced its long-awaited plan at its Auburn Hills, Mich., headquarters, saying it would cut 16 percent of the U.S. division’s worldwide work force, a move it hoped would return its U.S. operations to profitability by next year.
The plan came hours after Chrysler’s parent, DaimlerChrysler AG, said it was considering “far-reaching strategic options with partners” for Chrysler and that “no option is being excluded” as it reported a 40 percent drop in companywide profit for the fourth quarter.
DaimlerChrysler’s U.S. shares rose $5.33 or 8.3 percent to close at $69.78 on the New York Stock Exchange.
The plan calls for closing the company’s Newark, Del., assembly plant, and reducing shifts at plants in Warren, Mich., and St. Louis. A parts distribution center near Cleveland also will be closed, and reductions could occur at other plants that make components for those factories.
Under the plan, 11,000 production workers — 9,000 in the U.S. and 2,000 in Canada — will lose their jobs over the next three years, and 2,000 salaried jobs also will be cut — 1,000 each year.
The announcements were not a surprise. Stories earlier in the week correctly identified all of the plants to be targeted.
One small surprise — there was speculation DaimlerChrysler would offer buyout packages to reduce its number of workers in the United Auto Workers jobs bank as Ford and General Motors did in 2006. But buyouts were not included in the plan.
“Last night the guys were really looking to see if they were going to offer buyouts,” said Marvin Hightower Sr. of Rockford, who has worked at the Belvidere plant since 1994. “Maybe that is in their future plans after they get the other plants settled.”
The job losses are the latest in a yearlong series of devastating cuts in the ailing domestic auto industry, which likely will lose more than 100,000 jobs in all.
“Today’s action by DaimlerChrysler is devastating news for thousands of workers, their families and their communities,” United Auto Workers President Ron Gettelfinger and Vice President General Holiefield said in a joint statement. “While Chrysler Group’s recent losses are not the fault of UAW members, they will suffer because of the reductions announced today.”
The job cuts at Chrysler will reduce by 400,000 the number of vehicles that operations can produce each year.
Many northern Illinois workers know the pain being felt in Delaware, Ohio, Michigan and Missouri.
In 2001, the company cut 26,000 jobs because of weak sales, including rapidly declining sales of the Dodge Neon, which was built in Belvidere from 1993 to 2005.
As part of that cutback, the company eliminated a second shift, laying off 350, while 600 others from the Belvidere plant chose early retirement.
The plant marched along on one shift until last year when DaimlerChrysler brought back not just a second shift but added a third because of expected demand for the Caliber, Compass and Patriot.
The year started with about 1,650 working at the Belvidere plant and ended with about 3,600. More than 500 of the new workers were transferees in from other Chrysler operations.
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