Chrysler cars and jobs to go
BY JAMES STANFORD | 5th Nov 2007
The first major action by the private equity firm Cerberus, which bought Chrysler for $US7.4 billion in May, has seen four models cut and significant hourly job reduction in reaction to slowing sales.
The job cuts, which affect around one fifth of Chrysler’s unionised workforce, are in addition to 13,000 redundancies Chrylser had announced before being sold to Cerberus.
Chrysler has also announced it will kill off the slow selling Crossfire, PT Cruiser convertible, Pacifica and Dodge Magnum.
There has been no timetable for when production of the models would wind-up, except the company did say it would happen sometime in 2008.
Chrysler Group Australia said it was not sure of when it would run out of Crossfire and PT Cruiser convertible stock.
Company spokesman Jerry Stamoulis said the loss of the two models would not have a big impact.
“Both have been doing about 10 cars a month or less for us during the last six months,” he said.
Chrysler’s Vice Chairman and President, Tom LaSorda said the cuts were needed to counter predicted slow sales in the US.
“We have to move now to adjust the way our company looks and acts to reflect a smaller market,” he said.
“That means a cost base that is right-sized and an appropriate level of plant utilisation.”Chrysler has just signed a contract with the US United Auto Workers union, committing to spend $US15 billion on products though to the end of 2011.
The company has announced it would introduce four new models in the US next year, including the Dodge Journey SUV, Challenger sedan and hybrid versions of the Chrysler Aspen and Dodge Durango.
Of those models, the only one likely to come to Australia is the Journey, which is a medium-sized seven-seat crossover wagon built off the Sebring platform.
It is expected the car would arrive in Australia late next year, but it is not yet clear exactly which version of the car would be chosen for local duty.
The separation of Chrysler and Mercedes after the DaimlerChrysler divorce is starting to take shape around the world, with the Japanese operations announcing at the Tokyo Motor Show that they will soon split.
In Australia, despite expecting to continue working side by side with their Mercedes counterparts in the Australia headquarters at Mulgrave, Chrysler workers have been shifted to the refurbished employee training centre up the road.
As reported previously by GoAuto, both Chrysler and Mercedes will continue to share several internal operational services including human relations, information technology and accounting services.
Mr Stamoulis said no plans to change the current set-up were “on the radar” and that Chrysler was instead concentrating on selling cars.