DaimlerChrysler will lay off 13,000 by 2009
Randall Chase

Associated Press - NEWARK, Del. - DaimlerChrysler employees were hit with news yesterday of impending layoffs as a result of shift eliminations and plant idlings under the company's restructuring plan, but some remained hopeful that they would find a way to keep working.

The Newark Assembly Plant, which makes the slow-selling Dodge Durango and Chrysler Aspen midsize sport-utility vehicles, is scheduled to go from two weekly rotating shifts to one shift in the second quarter of this year.

DaimlerChrysler plans to idle the plant, which employs about 2,100 workers, in late 2009 at the end of the Durango's production run.

Overall, about 13,000 Chrysler workers will lose their jobs over the next three years. The restructuring plan also calls for reducing shifts at plants in Warren, Mich., and St. Louis. A parts-distribution center that employs about 100 workers near Cleveland will be closed. Cutbacks are also possible at plants that make components for those factories.

DaimlerChrysler officials told workers at the Newark plant about the plan yesterday morning.

"They wanted to emphasize that idling is not closing," said Robert Cooke, 52, an electrician who has worked there for 12 years. "That's a matter of debate."

But Cooke and others said they would work hard to prove to management that the plant, which began producing tanks for the military in 1951 and converted to automobile manufacturing in 1957, can turn out a good product if given the chance.

"We shouldn't be looking at Toyota as No. 1," Cooke said. "I don't like being second fiddle to anybody, and we're not even second fiddle. We're more like third or fourth or fifth... . I think we can do something if we set out to do it."

John McElhaney, 45, a materials handler with 27 years at the Newark plant, said that idling equaled closing in his mind, but that he had to remain optimistic.

"I'm third-generation here," McElhaney noted. "My grandfather made tanks here."

Members of United Auto Workers Local 1183 noted that DaimlerChrysler planned to introduce 20 new models and more than a dozen redesigns as part of its plan and that they aimed to get a piece of the action.

"We intend to have one of the products or some of the products come to Newark Assembly," said Local 1183 president Richard "Mack" McDonaugh Jr. "I think after all of this has shaken out, we'll all be just fine."

McDonaugh said Newark workers would have to prove their worth to management, but that he was confident they would "shine."

"We're not the problem," said Chuck Madarani, 47, a repairman who has worked almost 29 years at the Newark plant. "The problem is that management made a bad decision. We paid the price."

Victor Harris, 56, a paint-shop worker with 35 years' experience, noted that the Newark plant had been idled before, but that its workforce had always managed to survive in some fashion.

"This plant could reopen in the future with a new model," he said.

"It's a shame that Chrysler didn't give us something better," Harris added, referring to the slow-selling SUVs. "That's not our fault."

Under the plan, 11,000 production workers - 9,000 in the United States and 2,000 in Canada - will lose their jobs over the next three years, and 2,000 salaried jobs also will be cut: 1,000 this year and 1,000 in 2008.

Aside from the job cuts, Chrysler's German parent, DaimlerChrysler AG, said it was looking at all options to revive its fortunes, including partners for the troubled Chrysler. Its chairman would not rule out a possible sale of the U.S. operation.

Chrysler blamed the wrenching restructuring on poor sales after a shift in consumer taste from SUVs and trucks to more fuel-efficient vehicles. Workers blamed management.

Like the other domestic automakers - Ford Motor Co. and General Motors Corp. - DaimlerChrysler's earnings have been hit hard by rising labor costs and slumping sales as consumers have turned to foreign models. For years, they pinned their fortunes on higher-priced SUVs and trucks, but that strategy soured when gas prices climbed to nearly $3 a gallon.

DaimlerChrysler chairman Dieter Zetsche, asked repeatedly about a potential sale or partners for Chrysler, said: "We do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler."

DaimlerChrysler shares closed up $5.33, or 8.3 percent, at $69.78 on the New York Stock Exchange.