With sales of light trucks and SUVs flagging, the Chrysler Group plans to cut 250 jobs next week at its Detroit plant that builds standard eight-cylinder engines for the Dodge Durango and Jeep Grand Cherokee and other vehicles, local UAW officials said.
The job cuts — which will trim the work force at the Mack I engine plant to 530 employees — come amid challenging times for the Auburn Hills automaker.
The Chrysler Group is expected to unveil a restructuring plan in mid-February that's likely to include cost-cutting measures including layoffs, plant closings and shift eliminations.
While no one questions that Chrysler's truck-heavy lineup is suffering in showrooms, some union officials who spoke to The News on the condition of anonymity said the automaker appears to be taking a hard line with the United Auto Workers.
Cutbacks at Mack I and other plants, such as its Detroit Axle factory, are coming as Chrysler executives have been openly frustrated that the UAW hasn't granted the automaker the same health care concessions afforded to General Motors Corp. and Ford Motor Co.
Chrysler would not confirm the Mack 1 layoffs nor would the company comment on reports of similar cuts at Detroit Axle and an Indiana plant that makes transmissions for the Dodge Ram and Dodge Dakota pickups. Sales of both vehicles are stagnant.
“We continue to evaluate our operations in an effort to remain competitive,” said Michelle Tinson, a Chrysler Group spokeswoman. “Achieving operational efficiencies at our manufacturing sites is a common occurrence. As stated previously, the company will announce restructuring actions once approved by the board of management.”
Workers receive letter
Labor experts said the union members' stance on the pending job cuts at the Mack I plant and elsewhere isn't surprising.
“Job cuts are always painful,” said Harley Shaiken, a labor expert at the University of California, Berkeley. “Chrysler has sent signals that there may be a major restructuring as its financial position slips. I suspect these cuts are the forerunners of that restructuring. Are they a response to not getting further health care concessions? Probably not.”
Lorenzo Poole, president of UAW Local 51, which represents the Mack plant employees, declined to comment Monday.
Workers at Mack I received a letter last week about the possibility of layoffs from Holly Waingrow, second-shift chief steward at the Mack plant.
“I truly wish I had the ability to stop layoffs and provide a secure future for every union member,” the letter states. “However at this time, I am not sure that anyone can.”
The Mack 1 workers also received a list of telephone numbers to contact human resources and union officials, and a short question-and-answer section about the jobs bank, an unemployment system set up by the domestic carmakers and the union that provides pay and benefits during layoffs.
“At the time of authoring this letter, there is still much to be worked through on many different avenues regarding the jobs bank I can assure you that our local leadership is working very diligently to secure the jobs bank for all members,” the letter states.
Expert: Cuts mirror market
Since last year, production at the Mack 1 engine plant has declined as demand for light-truck vehicles fell amid rising gas prices. In 2006, sales of Chrysler's light-truck vehicles fell 8.4 percent, according to Autodata Corp.
By the end of the year, production of the standard 4.7-liter V-8 engine at the Mack plant fell to 850 units daily from 1,350 units earlier in 2006.
Union officials partly attribute the drop-off to the automaker's heavy promotion of its more powerful Hemi V-8 engine built in Mexico.
Shaiken said it is more likely that the cuts reflect Chrysler's efforts to bring its production in line with market demand.
“The future cuts that Chrysler hinted at are going to be certainly not welcome by the union, but none of this is a surprise,” he said. “What's going on primarily reflects the economic situation.”
