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The Detroit News

Jefferson North shift to end Feb. 4., memo states; buyouts in the works.

The lingering slump in Chrysler LLC auto sales will give workers at two factories an unexpected break in January.

The Jefferson North Assembly Plant in Detroit and Windsor Assembly Plant will shut down for part of January as the Auburn Hills automaker appears to be lowering production in response to forecasts of declining 2008 vehicle demand.

Jefferson North, which produces the Jeep Grand Cherokee and Jeep Commander, will shut for three weeks beginning Jan. 14; and Windsor Assembly Plant, which produces the Dodge Grand Caravan and Chrysler Town & Country, is scheduled to close for two weeks starting on the same date, union officials at both locations confirmed Tuesday.

In another development, Chrysler will eliminate the second shift at Jefferson North on Feb. 4, according to a memo to workers obtained by The Detroit News. Last month, Chrysler said it would cut shifts at five North American plants, including Jefferson North.

News of Chrysler's temporary factory shutdowns come on the heels of similar news from Ford Motor Co., which on Monday temporarily closed its light truck plant in Dearborn and another in Kentucky -- two weeks ahead of their planned holiday closings. The Dearborn plant builds the F-150 pickup and the Louisville, Ky., builds the Explorer sport utility.

Company spokeswoman Anne Marie Gattari said the move is part of the company's typical response to adjust supply to meet fluctuating demand.

All three of the domestic automakers are cutting back production to meet the slowdown in demand.

After releasing their sales figures for November, both Ford and General Motors Corp. announced they would cut first-quarter production.

Automaker files required notice

Sources last week said Chrysler, now privately owned, would reduce truck production at three plants in January, including shutting Warren Truck for the entire month. Chrysler has not made an announcement on its 2008 production plans.

Chrysler officials would not confirm the Feb. 4 date for ending the second shift at Jefferson North, but the automaker filed a federally mandated Worker Adjustment and Retraining Notification (WARN) notice with the state on Nov. 30 that gave the required 60-day minimum notice of the layoff of 911 workers.

Buyout plans for Jefferson North workers haven't been announced, but are coming, said Chrysler spokeswoman Michele Tinson.

"We will do the socially responsible thing and individuals at affected plants will receive a special program," she said.

Tinson said shift reductions at the other four plants, including Sterling Heights Assembly, will be staggered throughout the first quarter of 2008.

UAW cites work schedule uncertainty

Chrysler's Jefferson North plant shutdown could be prolonged, according to a Dec. 6 memo to workers from Duraye Foster, UAW chief steward, District 1. The memo said dealers have ordered only 2.4 days of production from the plant, as of Dec. 5.

"There is a lot of uncertainty about the work schedule," the memo stated. "The fact is that people are not buying cars right now that means we could experience some heavy unexpected down time until sales pick up."

The fact that Chrysler is looking to cut production of its large SUVs along with its trucks should come as no surprise, said Erich Merkle, vice president of forecasting for IRN Inc. Demand for Chrysler's large SUVs fell 45 percent last month compared to November 2006, according to Autodata.

"Chrysler is finally biting the bullet," he said. "They've been over-producing for a long time, and they have to get their inventory levels in order."

More surprising is production cuts to Chrysler's newly introduced minivans. Merkle said currency issues may be encouraging the automaker to limit production in Canada in favor of a St. Louis-area plant that makes the same vehicles.

Bringing production in line with actual demand will ultimately help Chrysler, Merkle said.

"In the long run, they won't have to push overproduced vehicles in the market place," he said. "That will limit the need for incentives and increase residual values."
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