Chrysler workers in the US apparently are referring to Wednesday’s expected restructuring announcement as the ‘Valentine’s Day massacre’.
Analysts have told The Associated Press (AP) that the automaker’s plans could cost 10,000 production jobs.
Rumours are flying around, according to the news agency. These include: two plants shutting down; buyout or early retirement offers [similar to those offered to Ford and General Motors hourly workers last year], or straight lay-offs.
“We hear they’re going to call it the Valentine’s Day massacre,” an already laid-off worker named Steve Laube told the Associated Press. He was reporting with other idle workers to ‘jobs bank’ duty, for which they get most of their pay to perform community service work or sometimes just hang around the union hall.
The ‘jobs bank’ deal, common to the Big Three, was negotiated in better times and is something the Detroit automakers want ultimately to get rid of in future contract negotiations with the United Auto Workers (UAW) union. Along with generous health benefits, also negotiated in better times, it puts the US-based automakers at a disadvantage compared with their foreign-owned non-union rivals who own much newer and more efficient factories in the southern US and can hire or fire at will.
Laube, 49, has worked eight years as an electrician at Chrysler’s Jefferson North Assembly Plant in Detroit, the AP report said, but is so low on the seniority list that he was laid off on 1 January due to falling demand for the plant’s Jeep Cherokees and Commanders.
“They don’t clue us into anything,” he told the news agency. “You just hear rumours, rumours, rumours.”
According to the report, analysts predict another 1,000 to 1,500 salaried workers could also lose their jobs [joining tens of thousands of white collar workers from Ford and GM either laid off or offered early retirement] as Chrysler Group joins its two Detroit rivals in trying to downsize factory capacity to match lower demand for its products.
Much of the shrinkage, analysts reportedly believe, will come at plants that make truck-based products, sales of which are slowing as North American consumers switch to more fuel-efficient car-based vehicles.
AP noted that Chrysler lost $US1.5bn 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, the news agency added.
AMR Research industry analyst Kevin Reale told the Associated Press that Chrysler probably has 15% too much manufacturing capacity.
Top of the analysts’ list for closure is the 2,100-worker plant in Newark, Delaware, that assembles the slow-selling Dodge Durango and Chrysler Aspen mid-sized SUVs, according to AP. Analysts also reportedly say the Mack Avenue Engine Plant 1 in Detroit, with about 530 employees, also is a possibility because it makes the 4.7-litre V8 engines that go in slow-selling trucks.
Chrysler would not tell the news agency which plants are on the blocks, saying only that details would be released on Wednesday morning along with the company’s 2006 earnings report.