Hills, Mich., Jan.29, 2001 -- Chrysler Group is today announcing
the next major part of its turnaround plan to regain competitiveness
under difficult business circumstances.
Over the course
of the next three years, the Chrysler Group will reduce its workforce
by approximately 20 percent. The reduction will be approximately
the same percentage for both salaried and hourly employees. This
will affect about 26,000 people - 19,000 hourly and 6,800 salaried
(including 1,800 supplemental employees) - through a combination
of retirements, special programs, layoffs and attrition.
Group President Dieter Zetsche, left, Wolfgang Bernhard,
chief operating officer, and Nancy Rae, senior vice president
- Human Resources, right, announce a part of the Chrysler
Group's turnaround plan at the U.S.corporate headquarters.
It is expected
that 75 percent of the overall reduction will be achieved in 2001.
This is being done within the framework of existing union contracts.
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."
"Only by adapting our overall cost structure, workforce and
production levels to the realities of the marketplace, while maintaining
our investments in exciting products, can we establish a sound
basis to ensure the long-term health of the Chrysler Group for
its numerous stakeholders and be in strong position for future
taking these actions at this time, in order to accelerate improvement
in Chrysler Group's financial performance," said Zetsche.
The full Chrysler turnaround plan will be presented to the public
at the DaimlerChrysler Annual Press Conference on February 26,
A series of
manufacturing actions will be necessary to attain the objectives,
including reducing 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.
also will adjust component, stamping and power train volumes commensurate
with the reductions in assembly capacities. Overall, the workforce
reduction proportionately greater in Canada than in the United
States due to the higher number of employees in assembly operations
whose products are impacted.
all facilities have new targets to accelerate quality levels and
productivity , so that the company can operate more efficiently
and at a much improved cost structure over the mid to long term.
"Especially as we implement these actions, we are fully committed
to ensuring what has always been a key strength at Chrysler -
- an exciting and innovative range of products," said Zetsche.
"These initiatives reinforce that commitment by minimizing
our workforce reductions within the product development organization."
Programs: 28,620 Employees Eligible
that Chrysler Group has a large number of retirement-eligible
employees, we believe that a large part of our goal can be reached
through voluntary special retirement programs by the end of the
first quarter this year," said Zetsche.
hourly (U.S.: 21,000; Canada: 2,700) and 4,920 salaried (U.S.:
4,600; Canada: 320) employees in the U.S. and Canada are eligible
for regular retirement or for one of the special programs. The
number of layoffs necessary to meet the workforce reduction goals
in the near term will depend on participation rates in these programs.
As the company manages its way through this reduction, it will
provide retirement planning services to counsel eligible employees
through their transition.
management team has maintained an open and continuous dialogue
with the leadership of the United Auto Workers (UAW) and the Canadian
Auto Workers (CAW), as well as with other employee representatives,"
said Zetsche. "In that process of discussion, solutions were
found that are in line with the framework of our current labor
are a crucial part of the company's latest initiative in its turnaround
plan, following a material cost reduction program that was put
in place at the start of this year.
Group manufacturing actions include the following:
(Illinois) will eliminate one shift of operation
Jefferson North (Detroit, Michigan) will eliminate one shift of
Toledo II (Ohio) Assembly Plant will eliminate one shift of operation
Newark (Delaware) Assembly Plant will reduce line speed
Ontario) will eliminate one shift of operation
Pillette Road (Windsor, Ontario) will eliminate one shift of operation
Windsor (Ontario) Assembly Plant will reduce line speed
Plant will close
Assembly Plant will close
Campo Largo (Parana, Brazil) Assembly Plant will discontinue production
and be idled; an evaluation will be made on any future production
possibility at that facility
will be shifted from the Mound Road (Detroit, Michigan) Engine
Plant to Mack I and Mack II (Detroit, Michigan)
Lago Alberto Assembly Plant will shift production to the Saltillo
Toluca Engine Plant will close