Chrysler to cut 300 jobs at Detroit plant

KATIE MERX | FREE PRESS BUSINESS WRITER - - Chrysler Group will cut more than 300 jobs at a Detroit engine plant, beginning in January, when it eliminates a shift.

The company confirmed Thursday that it will cut a shift at the 780-person Mack Avenue Engine 1 plant beginning in January.

The cuts come at a time when the Chrysler Group is cutting production of its profitable pickups and SUVs in hopes of avoiding the kind of sweeping restructuring currently under way at Ford Motor Co. and General Motors Corp.

All three automakers have announced plans to cut production of large vehicles in the second half of the year, as fuel prices hovering around $3 per gallon continue to drive customers to smaller, fuel-efficient -- but less-profitable -- cars.

Chrysler executives are optimistic that a batch of new models coming late this year will help the division of DaimlerChrysler AG finish the year profitably and with an increase in market share.

Spokeswoman Michele Tinson said she couldn't specify how many jobs at the Mack Avenue engine plant would be affected because people could retire or leave before the end of the year.

The number of people laid off also could be affected by changes in the number of engines produced per shift, she said.

"It's important to stress that this only affects Engine 1 assembly," Tinson said.

An engine-plant worker, who asked not to be named, said workers were told on Monday that 350 to 380 jobs would be cut at Mack Engine 1. He said Mack 1 also has about to six weeks of downtime coming later this year.

The plant was ranked by the Harbour Report, a closely watched annual study of manufacturing efficiency, as the most efficient in North America at making V8 overhead cam engines.

The worker said about 70 jobs also would be eliminated at Mack Engine 2, but Tinson said she was not aware of that.

While both plants are scheduled to build engines through the end of the decade, the worker's concern is that both plants could be closed.

"With the way things are going now, we don't know," he said.

Mack Engine 1 makes the 4.7-liter V8 engines for the Jeep Grand Cherokee, Jeep Commander and Dodge Durango SUVs as well as the Dodge Dakota and Dodge Ram pickups.

Mack Engine 2 employs 744 workers and makes the 3.7-liter V6 engine for those same vehicles, plus the Jeep Liberty compact SUV.

Chrysler has said it will take between 65,000 and 75,000 units out of its manufacturing volume of about 2.8 million vehicles this year, most of that in SUV and truck production as consumer demand shifts to smaller vehicles.

Chrysler officials have said it is to be expected that those moves would result in a similar reduction in the need for engines and transmissions.

Analysts have said Chrysler's production cuts could result in 20,000 fewer vehicles in the fourth quarter.

Chrysler Chief Executive Officer Tom LaSorda has told employees to plan for gas prices to remain in the $3- to $4-per gallon range going forward.

If that scenario plays out, auto-industry analysts say it is likely to mean a permanent reduction in the workforces that make the parts for and assemble pickups and SUVs.

"We're going to see more customers going for the more efficient vehicles," said Keagan Patrick, a research analyst at AutoPacific in Tustin, Calif.