DaimlerChrysler AG, the parent company of the Chrysler Group, is already talking with several interested firms to sell the troubled American car company. Auctioning the third largest U.S. car manufacturer has surfaced after several losses on the part of Chrysler. The company has already announced earlier this year that they will be cutting down jobs, close plants, reduce shifts.
Recently though, the company announced that they will be building two new plants in the United States. But in spite of the new plants, the company has also announced that they will be cutting down jobs. It has been announced that approximately 1,400 jobs would be shaved as a result of the upgrading of Chrysler's two assembly plants.
The company announced that they will be investing $1.78 billion in the modernization of their assembly plants. One of the two new plants will be put up at Marysville which is near Port Huron where they will allocate $700 million. The second facility also to be built in Michigan will be located at Trenton. The upcoming Trenton plant will have a budget of $730 million and this would be the plant where Chrysler plans to manufacture the next generation of Chrysler V6 engines.
Aside from the two new plants, Chrysler also announced that they will be investing $300 million in a new paint shop at their existing Sterling Heights facility. The said facility is currently tasked with the assembly of the Chrysler Sebring and the Dodge Avenger. A $50 million investment will also be allocated for the upgrading of the company's stamping plant located in Warren. The Warren facility is where the Chrysler Group builds the Dodge Ram and Dakota pickup trucks. These vehicles are of course designed to be compatible with their performance parts such as the systems.
The new Marysville plant will be tasked to produce Chrysler axles and will replace the current Detroit Axle plant. While the present axle plant employs about 1,600 persons, the new facility will only hire approximately 900 workers. The reduction of the workforce is the result of advanced assembly technology which eliminates some human involvement in the assembly process. And this would be the same with the new axle plant - the new engine plant will also hire fewer workers as compared to the existing engine plant. From the existing 1,600 employees of the engine plant, that number will be reduce to only 485 at the new engine plant.
Because of the modernization of the plants and the number of employees expected to accept the buyouts that are going to be offered, the total workforce reduction is estimated to be at 1,465 jobs. It can be remembered that Chrysler already announced that they will be cutting down 13,000 jobs as a part of its restructuring plans.
As far as labor unions are concerned, the UAW members at the Detroit axle plant voted for new work rules at the new plants. The Trenton UAW workers have already agreed on the new work rules for the upcoming new engine plant. Chrysler stated that the new work rules will be beneficial to both parties. Under the work rules, Chrysler employees will be allowed to work in teams and do multiple jobs.
The announcement came in the middle of talks about DaimlerChrysler auctioning off its U.S. operations. In response to issues concerning the auctioning of Chrysler, CEO Tom LaSorda has this to say: "The business has a responsibility to keep running." He also added that they are "not going to let up". The new plants will be producing fuel efficient cars as the demand for fuel misers increases. It is also a part of Chrysler's plan to invest $5.8 billion to $6 billion annually in their operations.
