Although the U.S. light vehicle market rose slightly in October Chrysler LLC said yesterday that an industry-wide volume reduction and sales slowdown required plant adjustments. Four products from Chryslerline-up will be cancelled, while two new products and two hybrid models are to be launched. Volume-related job reductions will follow at several North American Chrysler assembly and powertrain plants.
Shifts will be eliminated at five North American assembly plants (including third shifts at three of them, in the Mid-West and Ontario) which, combined with other job cuts, will lead to a reduction of 8,500-10,000 additional production jobs next year. 1,000 salaried jobs will be cut and supplemental (contract) employment will be cut by 37%. Chrysler also plans to eliminate hourly and salaried overtime and reduce outsourced services due to the reduction in sales volume.
The job cuts add to 13,000 jobs to be eliminated by the three-year Recovery and Transformation Plan (RTP) announced in February.
The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint, said Bob Nardelli, Chairman and CEO. Annual industry volume (U.S. market) then was running at a 17.2 million clip. Now, we expect a seasonally adjusted annual volume for 2007 to be significantly lower and carry over into 2008."
In contract negotiations just concluded with the United Auto Workers, Chrysler committed to spending more than $15 billion on products, plants and engineering during the life of the contract which ends in 2011.
The company announced that it will eliminate four models through 2008, including Dodge Magnum, the convertible version (only) of Chrysler PT Cruiser, Chrysler Pacifica and Chrysler Crossfire. In the same time frame, Chrysler will add two all-new products to its portfolio: the Dodge Journey and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango.
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