DaimlerChrysler AG is reconsidering a $Can 1.5 billion expansion of its Windsor, Ontario, van plant in Canada as part of its wide-ranging effort to cut costs, Bloomberg News reports.

DaimlerChrysler replaced American management staff with Germans at the head of Chrysler two weeks ago and stopped production at three North American factories in the face of declining sales.

Bloomberg says US Chrysler sales fell 2.6% to 2.34 million vehicles this year to the end of October, leaving it with an 80-day supply of vehicles in an industry where a 65-day supply is considered normal.

Earlier this year, DaimlerChrysler announced the $Can 1.5 billion expansion of the Pillette Road van plant in Windsor and workers have since nearly completed the structure's steel skeleton. But the expansion may be scaled back as part of a cost-cutting campaign the company will announce next year, Bloomberg said, quoting DaimlerChrysler spokeswoman Shawn Morgan.

"At this point there's no change, but it's being looked at like everything else because of this restructuring plan," Morgan reportedly said.

Bloomberg said that Dieter Zetsche, who recently replaced Chrysler Group president James Holden, on Tuesday (28/11/00) met Canadian Auto Workers union officials who represent 13,800 DaimlerChrysler workers, including those at the Pillette Road plant.

He reportedly promised that the company won't announce sharp job cuts without allowing union leaders to make counter-proposals first, said Ken Lewenza, president of CAW Local 444 at the Pillette Road plant. Lewenza, who attended the meeting, acknowledged to Bloomberg News that the factory’s expansion is being reviewed.

Buzz Hargrove, the CAW president, also attended the meeting and Stephen Yokich, president of the United Auto Workers union, met with Zetsche last Monday (27/11/00). Neither the company nor the UAW would comment on Tuesday’s meeting.