Chrysler's Fenton plant to lose 1,300 jobs in restructuring
DaimlerChrysler AG's Chrysler Group said Wednesday that 1,300 production jobs at its Fenton, Mo., South Assembly Plant will be eliminated by the second quarter of 2008. The elimination of the plant's second shift is part of a three-year nationwide restructuring plan that calls for a work force reduction of 13,000, or 16 percent, by 2009 in an effort to save $4.5 billion.
The South plant, which makes Chrysler minivans currently has two shifts. Analysts had expected cuts at Chrysler's North truck assembly plant; under the announced restructuring, neither the North nor South plant is scheduled to close. The North facility employs about 2,300 workers and the South employs about 3,200.
The reason for the capacity adjustment in minivans, according to Chrysler corporate spokeswoman Michele Tinson, is that "the market is shifting away from trucks, minivans and SUVs to smaller, fuel-efficient vehicles." Of the 1,300 local jobs to be cut, 300 will be eliminated this year for "productivity improvements," according to Tinson. The remaining 1,000 will be eliminated during the second quarter of 2008.Chrysler estimates it will retain 34 percent of the market share in minivans with one less manufacturing shift, Tinson said.
Parent firm DaimlerChrysler said Wednesday that it recorded a loss last year of nearly $1.5 billion for Chrysler Group despite earning nearly $7.3 billion.
DaimlerChrysler Chairman Dieter Zetsche said in a statement that in addition to the restructuring, the company is looking into further strategic options with partners and that no option will be excluded, which analysts have said means a sale hasn't been ruled out.
"Chrysler's put forth a plan that they think will keep them viable for the long run, and St. Louis is an integral part of that plan," Fenton Mayor Dennis Hancock said. "The news isn't as dire as some media outlets have made it out to be," he said, adding that while the one shift closure is terrible, the news could have been worse. "The plan is to move forward with the ($1 billion) investment we announced some 16 months ago."
Hancock said that the $1 billion investment will go a long way to keep the Fenton plants viable and draw in suppliers. "There may be an opportunity for affected employees be absorbed by (the suppliers)."
Five of Chrysler's suppliers have announced plans to locate here to support the plant's planned expansion. Hancock said that in speaking Wednesday with Chrysler representatives, he asked what would happen if the minivan marketplace were to pick up. "They told me," Hancock said, "that the plan is fluid and will respond to the needs of the marketplace. It could be very good news."
As part of the restructuring, Chrysler said it will make a $3 billion investment in new engines, transmissions and axles as part of a "product offensive" of more than 20 new and 13 refreshed vehicles through 2009. Among the models the company called key products were the new Chrysler Town and Country and Doge Grand Caravan minivans.
No comments:
Post a Comment