Chrysler chief prepares for $4 gas

Tom LaSorda also says company continues to push UAW for conessions

JOSEPH SZCZESNY, Press Automotive Editor - -The Chrysler Group is now focusing on what happens to car sales when gasoline hangs around $3 or $4 per gallon as it prepares for the future Tom LaSorda, Chrysler Group chief executive officer, said Wednesday he still believes their is room for reaching a new agreement with the United Auto Workers on health care.

"I don't have anything new to report. We're going to keep dialoguing. The third quarter isn't done yet. We've still got a month and half. We know the competition and we know what has to be done," LaSorda told reporters after presiding over a kick-off of the company's United Way Torch Drive.

Moreover, the principal of pattern bargaining, which has long prevailed in the UAW's relations with the Big Three indicates that the Chrysler Group will get the same kind of deal as General Motors and Ford Motor Co.

The UAW signed agreements last year that have placed new limits on health care benefits for both full time employees and retirees at both companies.

The UAW, however, has reacted coolly to Chrysler's request and local union officials representing Chrysler workers have said they doubt they could get an agreement ratified. Failure to act on Chrysler's request could set the stage for a bitter clash during negotiations next year.

LaSorda also said he was pushing the group to put more emphasis on fuel economy. "Internally we're saying 'what if it sits between $3 and $4 per gallon.' I'm telling our team 'assume $3 per gallon and assume $4,' " he said.

"What do we do? I hope it goes down but that's like waiting for disaster so we preplan. We just got some fuel economy ratings on the 2.4 Sebring," he said. "We'll get 32 miles per gallon on the highway, which is great for a mid-sized sedan. We are looking at other applications for how we can use our powertrains and how to mix stuff around and get better fuel economy."

The Sebring built in the company's re-tooled assembly plant in Sterling Heights is due in showrooms this fall.

LaSorda also said the automaker was looking for a subcompact or B-class car to add to its current model line. "Hopefully we'll have a pretty good story," said LaSorda, who along with his other duties has decided to take a lead role in guiding the small car plan to fruition.

"We haven't said China. We've looked at Asia and Europe. We've got a couple of things in dialogue," said LaSorda, noting the company is trimming production of fullsize sport-utility vehicles and pickup trucks. Sales of the big vehicles have stalled as gasoline prices have increased.

"In trucks you can move the market a little. Fully 40 percent of the pickups are in the south. Our (market) share is holding but it's more expensive to hold," LaSorda said. "We have had a swing of about 4 percentage points from trucks and SUVs to mid-sized SUVs and smaller cars. Were adjusting production from bigger trucks to smaller vehicles."

Sales of big SUVs have been particularly slow, he said.

The company's new smaller vehicles are doing well, he added.

"We have 90,000 orders for the Caliber and Jeep Compass."

LaSorda also encouraged employees to give generously to the United Way this year. "It's no secret just how tough it's been for both our community and the United Way of Southeastern Michigan over the past few years. The Chrysler Group is known for its generosity and leadership and I know that I can count on you to maintain this tradition."