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Employment figures released today by Chrysler in advance of the negotiations with the United Auto Workers union show not only how deep Daimler cut worker ranks but the even greater slashes inflicted by Cerberus Capital Management in its tenure. At the end of 2000, Chrysler employed 75,489 hourly and salaried UAW workers. By the time Dr. Z and the Stuttgart Seven dumped Chrysler seven years later, that number was down to 44,075, a 41.6 percent decline. In just two years, "Chainsaw Bob" Nardelli trimmed the union ranks by an even greater margin, 44.6 percent, to just 24,403 employees. In period from 2000 to 2009, more than 67 of every 100 UAW jobs at Chrysler was cut. The salaried workers came out slightly better; only six of every ten positions were eliminated, but the hourly workers on the production floor saw their ranks trimmed by 68.4 percent. Since the alliance..

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[Erik Latranyi]

The constant comparisons between salaried and hourly workers maintains a mindset that is destructive, disconnected and dumb.

Everybody in the auto industry suffered over the last 10 years.  You can't go from building 16 million cars a year to 9 million without significant pain.

[freshforged]

wow.  I realized it was bad, but did'nt realize exactly HOW bad it had gotten.  what a long way they have to get back to a functioning company/devision

[bumonbox]

Just proof to what management didn't get.  

Anytime you do a personal budget, it is important to gauge the real benefit of cutting certain things.  This of course is ever more applicable for a large entity.  It's curious how management couldn't see one important fact:  If you rip out what is needed to produce your goods, how are you going to make money?   Most business men understand "You gotta spend money to make money".   Any leader with a brain, with the outcome of the release of the Triplets and Sebring / Avenger should have immediately recognized that the company needed to drop some serious cash to expand staffing and fix all that went wrong.  The other killer is how much extra they spend to cut people loose in terms of severance packages.  They just really shot themselves in the foot.

Sergio is slowly undoing the damage, but the shame is that recovering those jobs happens an awful lot slower than cutting them.

[RequieM]

bumonbox, on June 30, 2011 at 07:31 am, said:

Sergio is slowly undoing the damage, but the shame is that recovering those jobs happens an awful lot slower than cutting them.

The Damage cannot be undone, it was bandaged for the longest time, but Sergio is slowly removing the bandage and beginning to repair the damage

[lvelleq (o)llllll(o)]

bumonbox, on June 30, 2011 at 07:31 am, said:

Just proof to what management didn't get.  

Anytime you do a personal budget, it is important to gauge the real benefit of cutting certain things.  This of course is ever more applicable for a large entity.  It's curious how management couldn't see one important fact:  If you rip out what is needed to produce your goods, how are you going to make money?   Most business men understand "You gotta spend money to make money".   Any leader with a brain, with the outcome of the release of the Triplets and Sebring / Avenger should have immediately recognized that the company needed to drop some serious cash to expand staffing and fix all that went wrong.  The other killer is how much extra they spend to cut people loose in terms of severance packages.  They just really shot themselves in the foot.

Sergio is slowly undoing the damage, but the shame is that recovering those jobs happens an awful lot slower than cutting them.

Not taking a stance at all, but there are a couple things to remember here:

1. The figures cited in Bill's story are U.S. hourly workers (sans Toledo, which until the successor agreement is in place, is outside the national contract), and don't, obviously, include a bunch of employees in Canada and Mexico. With those, total employment for Chrysler Group LLC (sans Fiat) is about 52,000. Still way low, without question, and in need of boosting.
2. While job losses have been steep across the industry over the last decade, not an insignificant portion of those losses have come from productivity gains. As an example, as recently as the late 1990s in the now demolished Jeep Parkway plant in Toledo, there were nearly 300 people who worked in that plant's paint shop spraying vehicles as they came down the assembly line. When that plant was replaced by Toledo North in 2001, the paint shop was fully automated and robotized, and there are now two or three people whose job it is to fix painting errors as they are identified.
3. I would be extremely curious to see a graph of the number of engineers and designers in Auburn Hills and Worldwide yearly over the last decade. Plant closings, like Newark and St. Louis, and layoffs decimated the hourly workforce at Chrysler during this period and weakened the company, but to see the depth of the real damage inflicted on Chrysler by Daimler and Cerberus, those are the numbers I'd like to see graphed.*

*And no counting the engineers working on the line at GEMA, either.

[bumonbox]

lvelleq (o)llllll(o), on June 30, 2011 at 08:50 am, said:

Not taking a stance at all, but there are a couple things to remember here:

1. The figures cited in Bill's story are U.S. hourly workers (sans Toledo, which until the successor agreement is in place, is outside the national contract), and don't, obviously, include a bunch of employees in Canada and Mexico. With those, total employment for Chrysler Group LLC (sans Fiat) is about 52,000. Still way low, without question, and in need of boosting.
2. While job losses have been steep across the industry over the last decade, not an insignificant portion of those losses have come from productivity gains. As an example, as recently as the late 1990s in the now demolished Jeep Parkway plant in Toledo, there were nearly 300 people who worked in that plant's paint shop spraying vehicles as they came down the assembly line. When that plant was replaced by Toledo North in 2001, the paint shop was fully automated and robotized, and there are now two or three people whose job it is to fix painting errors as they are identified.
3. I would be extremely curious to see a graph of the number of engineers and designers in Auburn Hills and Worldwide yearly over the last decade. Plant closings, like Newark and St. Louis, and layoffs decimated the hourly workforce at Chrysler during this period and weakened the company, but to see the depth of the real damage inflicted on Chrysler by Daimler and Cerberus, those are the numbers I'd like to see graphed.*

*And no counting the engineers working on the line at GEMA, either.

Those are valid points.  There would be no doubt that cuts were inevitable.  REDUCTION is one thing.  But, as we know, they gutted what really were essential programs for the companies long term independent survival.  The picture ain't just in the numbers, but an assessment of how many important necessary things they gutted that compromised their ability to develop what they needed.  Which is what my rant is really about.  One could argue that with the advancement of technology in design, they might have even increased productivity and shaved off workload there.  Of course that would undoubtedly be countered by added demand and requirements placed on vehicle design as time has progressed.  Heck, think of all they have to tend to now in terms of technology integration.  A whole new mess to deal with.

[lvelleq (o)llllll(o)]

bumonbox, on June 30, 2011 at 09:29 am, said:

Those are valid points.  There would be no doubt that cuts were inevitable.  REDUCTION is one thing.  But, as we know, they gutted what really were essential programs for the companies long term independent survival.  The picture ain't just in the numbers, but an assessment of how many important necessary things they gutted that compromised their ability to develop what they needed.  Which is what my rant is really about.  One could argue that with the advancement of technology in design, they might have even increased productivity and shaved off workload there.  Of course that would undoubtedly be countered by added demand and requirements placed on vehicle design as time has progressed.  Heck, think of all they have to tend to now in terms of technology integration.  A whole new mess to deal with.

Agreed.
What I'm trying to figure out is, as they go into this pre-negotiation mode, what are they trying to show with these figures? Anybody have a guess?

[DaveAdmin]

There was also a large push of production to suppliers which is now slowly being reversed. Toledo Supplier Park is an example of this, the Hyundai Mobis jobs would have been Chrysler jobs. Using JATCO CVTs means fewer people producing transmissions at Chrysler -- and leaving New Venture Gear cuts the numbers. So did selling Huntsville, Chrysler's state of the art electronics division, now part of Siemens.  Yes, automation was a major factor, but one could look at Ford to see how much they cut for a comparison.

Professional vs management would be an interesting split among the salaried group. ... just as a way to see how top heavy the company was at various points. There are times when reducing size is good -- if you have layers of people who are only getting in the way (despite their own best intentions) though attrition and reassignment is really the best way to eliminate them...

[bumonbox]

RequieM, on June 30, 2011 at 08:48 am, said:

The Damage cannot be undone, it was bandaged for the longest time, but Sergio is slowly removing the bandage and beginning to repair the damage

I didn't mean who was restoring things to how they were.  Chrysler can never go back.  Many things that have been gutted are gone forever.  BUT, he has been steadily adding staff back.  He has been adding programs.  The company is returning to developing more.   So, yeah, he is repairing it.   Chrysler is a different company now.  And it's lost some of it's identity, which it can never regain.  But that was done well before Sergio entered the picture.  Not sure how previous owners thought the company would survive developing just a couple cars.  There is a very real problem they seemed to ignore:  Visibility.  Mercedes and BMW can get away with their presence because they are a "higher class marque".  But if you look at any other company that tried to become a low volume maker as a whole, they get forgotten, and wither.  Back under Cereberus, when they said Chrysler would no longer be a full line automaker.  it was starting to sound like they'd just sell large cars and SUVS / Minivans.  If you look at the other big makers, they get a lot of presence, because their smaller cars (even if they aren't money makers) sell in large numbers, making the brands far more visible.  

Product can be it's marketing.  In every business, you don't always justify a product based off what money it makes for the company, but what it brings to the table in terms of building other money making opportunities.

[Powdered Toast Man]

lvelleq (o)llllll(o), on June 30, 2011 at 08:50 am, said:

2. While job losses have been steep across the industry over the last decade, not an insignificant portion of those losses have come from productivity gains. As an example, as recently as the late 1990s in the now demolished Jeep Parkway plant in Toledo, there were nearly 300 people who worked in that plant's paint shop spraying vehicles as they came down the assembly line. When that plant was replaced by Toledo North in 2001, the paint shop was fully automated and robotized, and there are now two or three people whose job it is to fix painting errors as they are identified.

This is a completely valid point here. As an example, I used to work in the broadcast industry (TV). When I started at a local station in 1999, there were about 60 people working there - production staff, engineers, editors, admin staff, etc. Now, there are approximately 10 employees total there - and that includes the on-air talent. Why? Automation happened. All the staff that used to run on-air programming (videotape, master control) - about 20 employees total - their jobs are now being done by a single computer server in another city. The news production crew? (director, switcher, audio, graphics, etc) There is now one crew out on the West coast that does the production remotely for all the stations across Western Canada. The news anchor literally sits in an empty room and there is a remotely robotic controlled camera there. Even the editors that cut together the footage are gone. The cameraman now uploads his raw footage to the West coast where an editor there cuts it together. Were any of these jobs absorbed elsewhere into the industry? The answer is no. Just about everyone I worked with there is no longer working in broadcasting because there are absolutely no jobs (myself included).

So yes, automation can cut the need for employees down significantly.

Edited by Powdered Toast Man, June 30, 2011 at 11:00 am.

[TexasBill]

lvelleq (o)llllll(o), on June 30, 2011 at 08:50 am, said:

Not taking a stance at all, but there are a couple things to remember here:

1. The figures cited in Bill's story are U.S. hourly workers (sans Toledo, which until the successor agreement is in place, is outside the national contract), and don't, obviously, include a bunch of employees in Canada and Mexico. With those, total employment for Chrysler Group LLC (sans Fiat) is about 52,000. Still way low, without question, and in need of boosting.
2. While job losses have been steep across the industry over the last decade, not an insignificant portion of those losses have come from productivity gains. As an example, as recently as the late 1990s in the now demolished Jeep Parkway plant in Toledo, there were nearly 300 people who worked in that plant's paint shop spraying vehicles as they came down the assembly line. When that plant was replaced by Toledo North in 2001, the paint shop was fully automated and robotized, and there are now two or three people whose job it is to fix painting errors as they are identified.
3. I would be extremely curious to see a graph of the number of engineers and designers in Auburn Hills and Worldwide yearly over the last decade. Plant closings, like Newark and St. Louis, and layoffs decimated the hourly workforce at Chrysler during this period and weakened the company, but to see the depth of the real damage inflicted on Chrysler by Daimler and Cerberus, those are the numbers I'd like to see graphed.*

*And no counting the engineers working on the line at GEMA, either.

According to Chrysler, the numbers include Toledo.

[DaveAdmin]

Toledo assembly plant, yes; Toledo Supplier Park, ?

[lvelleq (o)llllll(o)]

I stand corrected. I just re-read the notation at the bottom of the list. I had misread it earlier.
It does include the approx. 1,700 hourly Chrysler workers at TNAP and TSP. It does not include employees of suppliers on the Wrangler line, such as those who work for Hyundai MOBIS, which is about 600 additional.

[TexasBill]

Yes, improved productivity certainly led to some of the reductions. However, Cerberus came in and cut a larger percentage of the union workforce in two years than Daimler did from 2000 to the end of 2006. There's no reason to believe there was much in the way of productivity gains as Cerberus was not investing in improved production (or much of anything else).

I would like to have the numbers of how many engineers, designers, managers and other non-union personnel Daimler and Cerberus cut. We know that Cerberus shut down the Pacifica design center and cut the majority of the designers working there. Whatever "fat" had been on the Chrysler payroll at the beginning of the 21st Century had likely been trimmed before Cerberus came along. It's quite likely Daimler had already begun cutting away sinew and bone, but it's certain Cerberus was chopping away on the vital organs.

[jerseyjoe]

What surprises me is after the Blitzkrieg Chrysler is still here in any form. After two years I was all for canning Daimler all together then later on I was afraid once the hot air left the balloon  it would collapse. I still say a lot of credit goes to the Chrysler believers to keep it around,  548 US auto companies have come and gone in the last 100 years or so, Chrysler is not one of them. China is boasting about several hundred auto companies, its got a way to go to to reach our mark. The job is not finished yet but its a time to pause and reflect.