Chrysler to Cut 11,000 Jobs and Drop Models - Mercedes-Benz Forum

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post #1 of 19 (permalink) Old 11-01-2007, 10:15 AM Thread Starter
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Chrysler to Cut 11,000 Jobs and Drop Models

Chrysler to Cut 11,000 Jobs and Drop Models

DETROIT, Nov. 1 — Chrysler LLC said today that it would cut up to 10,000 more hourly jobs, eliminate 1,000 salaried positions, and discontinue shifts at five assembly plants in the United States and Canada, in the first major steps under its new private owners.

The company also is dropping four models from its lineup, including the convertible version of its PT Cruiser sport wagon, as well as the Chrysler Pacifica, a crossover vehicle criticized as being too big and too expensive for family buyers.

Also leaving the lineup are the Dodge Magnum, a low-slung station wagon, and the Chrysler Crossfire two-seater. Both those vehicles are based on underpinnings from Mercedes-Benz, which is owned by Chrysler’s former parent, Daimler AG.

The job cuts, which will take effect through 2008, are in addition to a plan announced in February that would eliminate 13,000 North American positions. The cuts, though expected, are deeper than industry analysts anticipated.

The actions were announced less than a week after Chrysler workers narrowly approved a new contract with the automaker, which was reached following a six-hour strike.

Robert L. Nardelli, who was named Chrysler’s chief executive in August, when the company was sold to Cerberus Capital Management, said today that the cuts were needed because of shifts in buyer demand since the original plan was announced.

“The market situation has changed dramatically,” he said.

In February, industry sales were running at an annual rate of 17.2 million vehicles.

But Mr. Nardelli said sales had softened since then and the company expected the slower pace to continue into 2008.

Many analysts and the auto companies expect industry sales to be in a range of 16 million vehicles this year and next.

“We have to move now to adjust the way our company looks and acts to reflect a smaller market,” added Thomas W. LaSorda, the automaker’s co-president. “That means a cost base that is right-sized and an appropriate level of plant utilization.”

Chrysler said the cuts at its factories would affect 8,500 to 10,000 workers. It said it would eliminate third shifts at plants in Belvidere, Ill., Toledo, Ohio, and Brampton, Ontario.

It also is eliminating the second shift of workers at the Jefferson North plant in Detroit and its plant in Sterling Heights, Mich.

The company also said it would reduce a shift at its Mack Avenue engine plant in Detroit, which has been working on three shifts.

As part of the announcement, Chrysler reiterated plans to add two new models to its lineup, the Dodge Journey, a crossover vehicle, and the Dodge Challenger sports car. It also said it would build hybrid-electric versions of the Chrysler Aspen and Dodge Durango, two sport utility models.

“These actions reflect our new customer-driven philosophy and allow us to focus our resources on new, more profitable and appealing products,” added James Press, Chrysler’s other co-president. “Further, these product actions are all in response to dealer requests.”

http://www.nytimes.com/2007/11/01/bu...l?ref=business
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post #2 of 19 (permalink) Old 11-01-2007, 10:21 AM
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Good but my fear is that these people will even fuk up the burgers that they will be making

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post #3 of 19 (permalink) Old 11-01-2007, 12:58 PM
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I bet that all of the powers that be, still can not figure out that why is it; that if all you build and then offer to sell is shit, why no one wants to spend their money on it?

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post #4 of 19 (permalink) Old 11-01-2007, 01:01 PM
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I bet that all of the powers that be, still can not figure out that why is it; that if all you build and then offer to sell is shit, why no one wants to spend their money on it?
Exactly

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post #5 of 19 (permalink) Old 11-01-2007, 01:56 PM
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Interesting that the article does NOT reference the contract that DC bound Chrysler to prior to the spinoff with the Chinese company Chery. But if it is financial, the Bear will keep you informed.
_____________________________________


Cars 'Made in China' coming to U.S.?
Taxes play role in driving Daimler-Chrysler to Beijing
Posted: February 15, 2007
1:00 a.m. Eastern

By Jerome R. Corsi
© 2007 WorldNetDaily.com

Daimler-Chrysler is exploring manufacturing cars in China for import back into the United States.

This news comes amid the company's "Valentine Day Massacre" announcement yesterday of more closings of U.S. auto plants and a further layoff of nearly 13,000 workers, some 16 percent of the company's workforce.

Structural trade advantages in China, including cheap labor, a government-subsidized currency and a Value Added Taxation policy that rebates the tax on Chinese exports are driving auto manufacturing from Detroit to Beijing.

David Elshoff, a spokesman for Daimler-Chrysler, confirmed to WND the company is in talks with the Chinese state-owned Chery Automobile Co. to joint venture the manufacture of a car in China for import to the U.S. market.

"In December 2006, we confirmed we signed a letter of agreement with Chery to manufacture small cars for import to the U.S.," Elshoff told WND. "The agreement is pending the agreement of Daimler-Chrysler's supervisory board and the approval of Chinese authorities."

Elsoff explained the agreement with Chery is for small vehicles, and Daimler-Chrysler has not yet specified which of the Chrysler group brands – Chrysler, Jeep or Dodge – the vehicles would be built under. They will be marketed internationally, including the European Union market, the NAFTA market and possibly other regions.

Elsoff also explained the discussions in China were about producing vehicles in market segments in which the Chrysler group does not currently compete.

"We're not talking about replacing plants or moving jobs," he said. "This joint venture effort would be incremental to our current lineup."

Elsoff argued it's a "general consensus among automakers and analysts that it's impossible to build competitively a small car in North America."

"The margins on small cars are so thin that the venture requires a low-cost source," he said. "It's no different than General Motors importing their Aveo from Korea. You can't make money in the North American market with a North American-produced vehicle."

Daimler-Chrysler underwent a restructuring in 2001 that has resulted in closing 16 plants in North America. Since 1998, Chrysler's job rolls have dropped by 44,000.

"We underwent a few years ago the restructuring that GM and Ford are going through now," Elsoff told WND.

Yesterday, at a press conference in Auburn Hills, Mich., Daimler-Chrysler's Chairman Dieter Zetsche announced the company was looking for further strategic options with partners for Chrysler. Zetsche said all options were on the table, including a possible divestiture of Chrysler.

Lloyd Wood, a spokesman for American Manufacturing Trade Action Coalition, told WND China is positioning to be a major player in car manufacturing and in the car parts business worldwide.

"The Chinese themselves have not been able to manufacture cars of the quality required to import them to the United States," said Wood. "But with a world class joint venture partner like Daimler-Chrysler, the Chinese will make great strides, not only in car manufacture, but in the automotive parts business where China has already begun to make an impact."

Wood confirmed to WND the Value Added Tax, or VAT, is playing an important role in driving auto manufacturing to China.

"The VAT is a little-understood structural element of our free trade agreements," Wood pointed out. "But if Chrysler establishes a joint venture in China, the cars made by the Chinese joint venture will get favorable VAT treatment, even though Chrysler is a U.S. company."

WND reported that under WTO agreements, the U.S. suffers a disadvantage in that countries with Value Added Taxes give rebates to domestic manufacturers that ship overseas, while at the same time applying their VAT taxes to U.S. imports entering their markets.

The U.S. has no tax similar to a VAT to impose on Chinese imports to the American market.

"China needs Daimler-Chrysler to go into China to set up a world class manufacturing operation," Wood explained. "China will begin importing the Daimler-Chrysler joint venture cars over here. Then some of the other Chinese companies will bleed off the expertise. In five or 10 years, I wouldn't be surprised to see 'Made in China' cars and auto parts gain a major U.S. market share."

Wood added than given time, China "will flood the world auto market, just like China has flooded every other market where China has competed, from toys to clothes to electronics."

"Unfortunately," Wood concluded, "the U.S. VAT trade policy is so messed up that we end up creating more of an incentive for Daimler-Chrysler to make cars in China than to make them here in the United States."

WND contacted the United Auto Workers for comment on this story, but the union declined.

WorldNetDaily: Cars 'Made in China' coming to U.S.?

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post #6 of 19 (permalink) Old 11-01-2007, 01:58 PM
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And then FIVE months Later...

Chrysler Signs Export Venture With a Chinese Automaker

By THE ASSOCIATED PRESS
Published: July 5, 2007

BEIJING, July 4 (AP) — The Chrysler Group signed a deal Wednesday with China’s biggest automaker, Chery Automobile, for a production venture that could export the first Chinese-made cars to the United States.

The first cars will reach Latin America or Eastern Europe within a year, and models might be exported to North America and Western Europe in two and a half years, Chrysler’s chief executive, Thomas W. LaSorda, said at a signing ceremony.

The alliance offers Chery, a 10-year-old company based in the eastern Chinese city of Wuhu, an opportunity to realize its longtime ambition of entering the American market.

Chinese automakers already export low-price trucks and buses to Africa and other developing markets. But analysts say the automakers lack the technology to meet American and European safety and pollution standards on their own.

Chery’s chief executive and chairman, Yin Tongyao, said the deal would help Chery improve its skills as it expanded foreign sales of its own models.

“Chery is still young, so we should learn from Chrysler and improve our own competitive edge in the near future,” he said, calling Mr. LaSorda “my teacher in the automotive business.”

The first Chrysler-Chery export will be based on Chery’s A1 compact and will be sold under the Dodge brand, Mr. LaSorda said.

A 1.3-liter version of the A1 is sold in China for the equivalent of $7,100 to $7,900. Export prices have not been announced.

Others also have announced plans to export Chinese-made cars to the United States, but none has yet made it to market.

A Chinese automaker, Changfeng Motor, said in January it hoped to sell sport utility vehicles in the United States within two years, but gave no details. Chery had a deal with the American entrepreneur Malcolm Bricklin to sell cars in the United States, but that fell through.

Honda Motor of Japan has exported Chinese-built Jazz subcompacts to Europe since 2005.

Asked if Chrysler, which is being bought by Cerberus Capital Management, was worried that the alliance would help Chery develop into a competitor that might threaten its American partner, Mr. LaSorda said: “No, we’re not. With us or without us, they’re going to grow. So the question is, are you going to go with a winner?”

http://www.nytimes.com/2007/07/05/bu...AG&oref=slogin

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post #7 of 19 (permalink) Old 11-01-2007, 02:06 PM
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Much like our discussions of Immigrant labor or Walmart, this is not about the quality of the Chrysler products, it is about a decision to offshore production to get cheap labor and maximize shortterm profits for stockholders and managers. While that is good for stockholders and managers in the shortterm, we have seen companies such as Chrysler drop from a $40Billion assessed value to a $6Billion assessed value in just a decade using those fine managerial tactics. Stockholder value, while gaining on the shorthaul, dies on the longrun.

The list of US Companies decimating their labor force to grab cheap labor, at the expense of communities across the country is staggering. We are quickly becoming a country of consumers only, not a very healthy long term foundation for an economy.

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post #8 of 19 (permalink) Old 11-01-2007, 02:50 PM
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^^ the US has already proven that it cannot supply B Segment cars profitably - GM is doing the same with what used to be Daewoo & ford with Kia
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post #9 of 19 (permalink) Old 11-01-2007, 02:53 PM
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Chryslers made in China with lead
Shitty quality that will get shittier.

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post #10 of 19 (permalink) Old 11-01-2007, 02:56 PM
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^^ the US has already proven that it cannot supply B Segment cars profitably - GM is doing the same with what used to be Daewoo & ford with Kia
It could, it just does not want to. Europe, which also has labor unions and all the costs associated with production seems to have no problem building small cars for their market, including GM and Ford.

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