Over the course of the next three years, the Chrysler Group is to reduce its workforce by approximately 20 percent. The company says that the staff reductions will affect about 26,000 people – 19,000 hourly and 6,800 salaried – through a combination of retirements, special programmes, layoffs and attrition.
Chrysler expects that 75 percent of the overall reduction will be achieved in 2001 and this is being done within the framework of existing union contracts.
The company plans to reduce shifts and line speeds, as well as idling selected plants to adjust production capacity at Chrysler manufacturing operations around the world. At this point in time, the company plans to reduce excess capacity by idling six manufacturing facilities over the next two years.
The company also will adjust component, stamping and power train volumes commensurate with the reductions in assembly capacities. Overall, the workforce reduction is proportionately greater in Canada than in the United States due to the higher number of employees in assembly operations.
This year, in the US, the Belvidere, (Illinois) plant, the Jefferson North (Detroit, Michigan) and the Toledo II (Ohio) Assembly Plant will eliminate one shift of operation, while the Newark (Delaware) Assembly Plant will reduce line speed. In Canada, the Bramalea (Brampton, Ontario) and the Pillette Road (Windsor, Ontario) will both eliminate one shift of operation while the Windsor (Ontario) Assembly Plant will reduce line speed.
In Mexico, the Toluca Transmission Plant will close. In South America, the Cordoba (Argentina) Assembly Plant will close and the Campo Largo (Parana, Brazil) Assembly Plant will discontinue production and be idled; the company will then make an evaluation on any future production possibility at that facility.
In 2002, in the US, engine production will be shifted from the Mound Road (Detroit, Michigan) Engine Plant to Mack I and Mack II (Detroit, Michigan) and In Mexico, the Lago Alberto Assembly Plant will shift production to the Saltillo Assembly Plant. The Toluca Engine Plant will also close.
‘Today’s actions will help remove the uncertainty many of our employees have been feeling,’ said Chrysler Group President and Chief Executive Officer Dieter Zetsche. ‘Part of this process may be painful for many people. However, to be truly competitive in today’s auto industry environment, we need to be a more nimble company, more closely aligned with current and future market conditions.’