Autoworkers brace for bad news
Chrysler workers have taken to calling it the “Valentine’s Day massacre.”
They are referring to Wednesday’s restructuring announcement from Chrysler Group, the U.S. arm of Germany’s DaimlerChrysler, one that some analysts say could cost 10,000 production workers their jobs.
As employees await the news, rumors fly: Two plants to be shut down; buyout or early retirement offers similar to what Ford Motor Co. and General Motors Corp. did to reduce their hourly workforces; flat-out layoffs.
“They don’t clue us into anything,” said John Laube as he and other laid-off workers reported Monday to “jobs bank” duty, for which they’ll get most of their pay to perform community service work or sometimes just hang around the union hall. “You just hear rumors, rumors, rumors.”
At 49, Laube has eight years in as an electrician at Chrysler’s Jefferson North Assembly Plant in Detroit, but he’s so low on the seniority list that he was laid off Jan. 1 because of slumping demand for the plant’s Jeep Cherokees and Commanders.
Analysts predict that an additional 1,000 to 1,500 salaried workers also could lose their jobs as Chrysler joins its two domestic rivals in trying to downsize factory capacity to match lower demand for its products.
Much of the shrinkage, analysts believe, will come at plants that make truck-based products, victims of the change in motorists’ tastes from sport utility vehicles and trucks to more fuel-efficient vehicles.
Chrysler lost $1.5 billion in the third quarter of 2006, and its sales were down 7% last year. Trucks and bigger SUVs historically account for about 70% of the company’s U.S. sales, more than any other manufacturer.
Kevin Reale, an industry analyst for AMR Research Inc., said Chrysler probably had 15% too much manufacturing capacity.
“They’ll have to trim out some assembly facilities to bring their capacity to produce vehicles in line with demand,” he said.
Atop almost everyone’s list for closure is the 2,100-worker plant in Newark, Del., that assembles the slow-selling Dodge Durango and Chrysler Aspen mid-sized SUVs. Analysts say the Mack Avenue Engine Plant 1 in Detroit, with about 530 employees, also is a possibility because it makes the 4.7-liter V-8 engines that go in slow-selling trucks.
Erich Merkle, an industry analyst with the auto consulting company IRN Inc., said a 2,330-worker plant near St. Louis in Fenton, Mo., that makes Ram pickups also is on his list because Chrysler has two other plants that make the Ram.
Chrysler won’t say which plants are being targeted. It says details will be released Wednesday morning in tandem with the company’s 2006 earnings.
With Durango sales down nearly 39% last year compared with 2005, Robbyn Taylor-Higgs, 50, a 27-year veteran of the Newark plant, is well aware that its shutdown is a possibility. Talk among employees is that it will either move to one shift by March 5 or shut down.
“We’re all on pins and needles right now,” she said. “It is scary.”
She’s been around long enough to remember the government bailout engineered by Lee Iacocca and other tough times, but believes this is more serious.
“Something always comes up to save us, but I think this time it’s different,” she said. “With the Germans owning us now, I don’t think the American spirit is behind us.”
Already politicians in Delaware are preparing for the worst.
Sen. Thomas R. Carper (D-Del.) drew parallels between the Newark plant now and GM’s decision in the early 1990s to reverse a decision to close a plant near Wilmington, Del., that now produces the popular Pontiac Solstice sports coupe.
“We didn’t take no for an answer then,” said Carper, who had just been elected governor when GM announced plans in 1992 to close the plant.
No matter which plants are closed, workers who are low in seniority could be bumped from their jobs by more senior workers from other plants.
That’s what troubled Laube as he and others waited at the union hall for details on an assignment to build a wheelchair ramp for a doctor’s office.
“I’m just trying to see what this is going to bring about,” he said. “If it’s not good, I’m going to have to figure out something else.”
