Chrysler offers buyouts to 23,000 more employees

Chrysler Group continues to trim the ranks of hourly employees. The automaker confirmed Friday that buyout and early retirement offers went out to 23,000 workers represented by the United Auto Workers union. The offers include cash, vehicle vouchers and, depending on tenure and location, at least some pension and retirement health benefits. Special offers are being made to employees working at plants scheduled to be closed. Skilled trades and salaried employees represented by the UAW are not eligible for the program. Chrysler spokeswoman Shawn Morgan declined to say how many employees the company hopes will take the offers by the deadline of November 13 and leave the company voluntarily.

Under the leadership of CEO Sergio Marchionne, the company is getting a top-to-bottom reorganization, but industry analysts say Chrysler may still need to close two more plants. A six-hour presentation scheduled for next Wednesday will detail the company’s plans to return to profitability in two years. It is expected the program will include more efficient manufacturing, better marketing and major changes to the vehicle lineup and organization. Early hints indicate Dodge cars will move to performance-oriented brand, Dodge trucks will become a brand in their own right and Jeep will targeted at increasing international sales. There are conflicting reports on the future of Chrysler itself, with some saying the brand will be the “family car” with a range of vehicles including the only minivan, while others maintain that Marchionne still wants to move the brand upscale.

Teamsters demonstrate to protest Chrysler transport changes

Members of the International Brotherhood of Teamsters staged demonstrations at seventy Chrysler dealerships across the United States yesterday. Distributing leaflets reading “Chrysler Greed Destroys Michigan Families,” the union members were protesting Chrysler’s decision to give some of its new vehicle transportation business to non-union companies, a change that could cost an estimated 1,700 Teamsters their jobs.

The demonstrations were part of a six-week campaign that will hit more American Chrysler dealerships. The union represents about 5,000 union haulers and fears up to a third of those jobs could go to non-union truckers.

Chrysler’s existing contracts with Allied Systems Holdings and Cassens Transport Company, worth about $111 million annually, expired at the end of last month. The automaker solicited competitive bids and awarded about a quarter of the business to other companies. The change eliminated the jobs of about 45 percent of the Teamsters working for Allied and Cassens in Michigan.

Chrysler maintains the changes were needed to save money and cut cash burn. A company official said the savings could be as much as $31 million over three years.

The union is concerned that General Motors may follow suit when its contracts expire.

Chrysler boosting pickup production

Dow Jones reports that Chrysler is boosting production as the government’s “Cash for Clunkers” program continues to pump demand, reducing the number of vehicles available at dealers.

Sources in the United Auto Workers union say employees at the Warren Plant were told they will work overtime Saturday shifts on Aug. 29, Sept. 19 and Sept. 26 and additional overtime may be scheduled in October. The Warren plant builds Dodge Ram full-size and Dakota mid-size pickups.

Chrysler officials would not comment on the reports.

Chrysler wants to respond to surging new demand without building too many vehicles which then require heavy incentives to move.

GM wants to cut more workers

In 1979, General Motors employed about 618,000 people. By the end of 2009, it will have eliminated more than 90 percent of those positions.

Another round of buyout offers ended yesterday. Any employee agreeing to leave could get $20,000 in cash and a $25,000 vehicle voucher. Workers with more than 20 years with GM can get $115,000 and the vehicle voucher. GM hopes 21,000 of its hourly workers will take the money and run, leaving the automaker with 33,000 hourly employees.

GM also wants to cut its white-collar headcount by 6,150 employees, leaving it with 23,500 white-collar workers at the end of 2009. This would give GM a total workforce of 56,500 employees, just over 9 percent the number it had thirty years ago.

General Motors isn’t just cutting employees to eliminate positions; the company’s plan is to replace more expensive experienced workers with new hires that will make half the current wage and get fewer benefits. The problem is the experienced workers know the buyouts aren’t worth very much when finding another job, even one that pays much less, is very difficult and that selling a house in the current Michigan market will make it harder to explore job opportunities outside of the state.

Toyota no longer profitable in the U.S.

Yoshimi Inaba, Toyota’s top executive in the U.S., says the company’s American operations are no longer profitable. Inaba, a Toyota executive vice president is the president and chief operating officer of Toyota Motor America and CEO of Toyota Motor Sales USA.

This is a major problem for Toyota, which gets the majority of its profit from sales in the North American market. Inaba says the company’s cost-cutting measures have been overwhelmed by a 38 percent plunge in sales of Toyota vehicles so far this year. He also blames complacency, centralized decision-making in Japan and a dull product line for some of Toyota’s woes, saying “Toyota is a good car but not exciting. Those are the comments we usually (or) always get.”

Inaba isn’t ruling out plant closings or layoffs. It is currently considering what to do with the Fremont, California plant it operated as a joint venture with General Motors. GM pulled out of the partnership while in bankruptcy, leaving Toyota with 4,700 United Auto Worker employees whose contract comes up for renewal next month. Toyota doesn’t want to close the plant because California is its biggest market.

Toyota also has a brand-new plant in Blue Springs, Mississippi. he structure is complete but no equipment has been installed. Asked if Toyota might simply abandon the plant, Inada said he hoped that would not be the case.

Inaba is hopeful that an improving American economy will help Toyota return to profitability next year.

Chrysler to keep 3rd shift at Windsor, continue building VW Routan

In a change of heart that will save over a thousand Canadian jobs, Chrysler has reversed its decision to eliminate the third shift at the Windsor minivan plant.

“It’s great news for 1,200 CAW Local 444 members out at the Chrysler plant and obviously the spinoff jobs that come with it,” Canadian Auto Workers President Ken Lewenza said Friday. “Obviously, it’s a strong message from Chrysler that they plan to maintain their market share lead in the minivan segment.”

In April, Chrysler and the CAW agreed to a new pact that brings labor costs in line with those of transplant automakers like Honda and Toyota.

Chrysler will also continue to build the Routan minivan for Volkswagen. Many had thought the Routan would be dropped due to sluggish sales, but numbers have risen in the past couple of months and Volkswagen says the Routan is now meeting its sales goals.

Marchionne moves quickly to upgrade Chrysler manufacturing

Sergio Marchionne, Chrysler Group’s new CEO, is wasting no time in making changes at the automaker. And, contrary to the norm in modern business, his focus is on management.

In an interview with the Financial Times, Marchionne said: “The problem is never with the blue collar – with the people running the business day to day. It’s the people at the top of the structure.”

Marchionne made good on his word recently with major shakeups in Chrysler management. Some have moved up and some have moved out but the CEO wants everyone to get the message.

According to Rick Laporte, president of the CAW local at Chrysler’s Windsor plant, Marchionne and his team have zeroed-in on implementing a world-class manufacturing system. Laporte said, “Fiat has stressed with us that they will remove the barriers in their way, including members of management who do not change their old ways.”

Leon Rideout, CAW local president at the Chrysler plant in Toronto, said the new bosses have enlarged assembly line teams from six members to ten.

Laporte to his local members about the changes, saying, “You will see it and feel it the first day back to work.”