DaimlerChrysler unveils downsizing plan

Shipment of 135,000 trucks, SUVs, and minivans will be halted under the decision, with 90,000 vehicles to be cut by September 30. The plan will reduce by nearly half the number of vehicles shipped to Chrysler, Jeep, and Dodge dealerships in the third quarter from the same period last year. This follows an announcement last week that Chrysler third-quarter losses may be $1.5 billion, more than double the company’s previous forecast. For the year, the North American division is projected to lose $1.2 billion.

Demand for large vehicles in the US dropped over the past year due to sharply higher gasoline prices and a generally slower economy. The automakers formerly known as the Big Three—General Motors, Ford, and the now number-fourth-ranked Chrysler—have responded to slower sales by downsizing operations, especially in Michigan.

Chrysler’s inventory reduction translates into a 16 percent production cut. GM cut its third- and fourth-quarter production by 20 percent; Ford is initiating second-half production cuts of 21 percent.

Last week, Ford announced that it intended to cut approximately 44,000 employees over the next few years, close 16 factories, and extend buyout options to all 75,000 hourly workers. Earlier this year, 113,000 GM workers were offered similar buyouts. So far, 35,000 have accepted.

In both restructuring plans, the United Auto Workers (UAW) union bureaucracy has proved itself instrumental in crafting and implementing cuts, as well as in extracting concessions from workers on pension and health care costs.

More
http://wsws.org/articles/2006/sep2006/chry-s21.shtml