Aug. 18, 2005. 06:43 AM Jobs to dwindle at Chrysler New CEO will focus on making better use of existing plants and workers TONY VAN ALPHEN BUSINESS REPORTER Toronto Star
AUBURN HILLS, Mich.-Job levels at DaimlerChrysler Canada Inc. will likely fall because the booming auto maker is focusing on ways to build vehicles more efficiently and maximize production capacity, says the company's incoming head of North American operations.
Tom LaSorda, who will become chief executive officer of Chrysler Group on Jan. 1, said yesterday that he doesn't see any prospects for new production investment in Canada and expects gradual reduction in jobs at assembly operations.
LaSorda, a Windsor native, told reporters at Chrysler headquarters here that Canada will have to compete for future investment after the company's decision to cancel two major projects in Windsor in recent years.
The Canadian Auto Workers union, which represents about 10,200 employees at Chrysler in Canada, insists that Windsor must be the site of any new company assembly plants in North America because the auto maker backed off on the earlier commitments.
But LaSorda, Chrysler's current chief operating officer, said the company has no short or even long-term plans to build new assembly operations on the continent because it is trying to squeeze out as much production as possible at current plants by moving from two to three shifts.
"We have all the capacity we need right now," he said.
DaimlerChrysler's two assembly plants in Windsor and Brampton already operate on three shifts.
LaSorda said vehicle demand and the best business case for assembly operations anywhere in the world will drive decisions on site selections.
"It's a global play now," he said. "You can make a product everywhere."
LaSorda said he does not expect the company's position to hurt negotiations next month when worker contracts expire in Canada.
"We have got a great working relationship," said LaSorda, who grew up in a union family. "I don't see this as a major issue in bargaining."
In 2002, DaimlerChrysler prevented a strike by indicating it would build an assembly plant for small trucks in Windsor if it could make a business case for the project.
The company cancelled the project the next year, saying the model could not generate enough demand. The decision infuriated the union.
But DaimlerChrysler added a third shift and about 1,000 new jobs in Brampton earlier this year because the Chrysler 300 luxury sedan has turned into a market hit.
Union president Buzz Hargrove has said a commitment for the next Chrysler plant will be a hot topic in bargaining but has stopped short of saying it is a strike issue.
LaSorda, who has turned around DaimlerChrysler's manufacturing operations in the past five years, said the company is "challenging" its engineers to design vehicles with more integrated systems and modules, which will mean the need for fewer assembly workers.
DaimlerChrysler AG, the world's fifth biggest auto maker, is introducing
10 new models during 2006 in the biggest launch year in the company's history.LaSorda said product demand can still create jobs but the employment numbers will be lower.
"Will it always be at the same level it is today? Not likely," he said.
Under LaSorda, the company has closed six factories and eliminated
26,000 jobs in North America since 2000 in efforts to stop big financial losses. The moves and hot new products have returned the company to profitability.The auto union has accepted the trend to bigger modules and more production efficiencies. However, it wants to reduce the impact by bargaining for more time off the job for existing workers, which would force more hiring.
LaSorda said the company is still negotiating with the federal government for financial assistance for construction of a new paint shop at its Windsor minivan plant. The shop, which will cost more than $350 million, is critical to the future of the plant and to improving vehicle quality.
Some union leaders believe DaimlerChrysler will use the paint shop as a bargaining chip in contract negotiations.
Meanwhile, LaSorda said the company may continue to offer employee discounts to consumers next month in Canada and the U.S. The discounts have sparked huge gains in sales at General Motors, Ford and Chrysler in the last few months.
"We are looking at it," he said. "We'll see what happens."
Although gasoline prices have soared to record highs in the U.S. and Canada this year, LaSorda said his company has not noticed a shift by consumers to more fuel-efficient vehicles.
The company is offering more engines that can shut off some cylinders in highway driving and reduce fuel consumption. It is also working on more efficient four-cylinder engines.
LaSorda said DaimlerChrysler will decide soon whether to start building minivans in China, but he has denied reports that the company would export any vehicles made there.
The company has assembled Jeep sport utility vehicles in China for several years.
The CAW has expressed concern about Chrysler's long-term intentions in China and the potential effect on the Windsor plant, the biggest minivan operation in the world.
The Supervisory Board of DaimlerChrysler AG today has taken the following personnel decisions:
As previously announced, Dr. Dieter Zetsche (52), at present Head of Chrysler Group, will be appointed Chairman of the Board of Management of DaimlerChrysler AG as of January 1, 2006. In addition, he will become Head of Mercedes Car Group as of September 1, 2005.
Dr. Eckhard Cordes (54), Head of Mercedes Car Group, will leave the company at his own request on August 31, 2005, after 29 years of service.
Thomas W. LaSorda (51) will become Head of Chrysler Group as of September 1, 2005. On the same date, Eric Ridenour (47) will succeed Thomas W. LaSorda as Chief Operating Officer (COO) of Chrysler Group. Ridenour has been appointed as Member of the DaimlerChrysler Board of Management for a period of three years starting on September 1, 2005.
Cordes, appointed last year to the Mercedes post, was passed over to succeed Schrempp in favor of Chrysler Group CEO Dieter Zetsche. Cordes offered his resignation, insiders say, because he felt he had lost the confidence of the board of directors. Zetsche replaces Schrempp on January 1, 2006.