Chrysler to cut 13,000 jobs by 2009

The Baltimore Sun

Three years ago, people couldn't get a big enough SUV. The bigger the better.

But by the time Chrysler Group came out last fall with its largest Chrysler sport utility vehicle ever, the eight-seater Aspen, gas prices had soared and the public's taste had downshifted to smaller vehicles that got more miles to the gallon.

It was enough to give an auto manufacturer whiplash.

Yesterday, Chrysler announced that it would lay off 13,000 employees - 16 percent of its work force - and idle the Newark, Del., assembly plant that produces the truck-based Aspen and its Dodge counterpart, the Durango, by 2009. About a quarter of the plant's 2,100 employees commute to Newark from Maryland, mostly from Cecil County.

Chrysler announced the restructuring plan the same day its German parent, DaimlerChrysler AG, reported a 40 percent drop in fourth-quarter profit and left open the possibility it would sell off all or parts of Chrysler.

Chrysler also plans to reduce shifts at plants in Warren, Mich., and St. Louis, and close a parts distribution center near Cleveland.

Chrysler's cuts come on the heels of major reductions by the nation's two other domestic automakers, Ford Motor Co. and General Motors Corp., which vowed to make smaller cars and more fuel-efficient "crossover" SUVs - long the bread and butter of their foreign competitors.

The upheaval has had a ripple effect across the industry. A large parts supplier with significant operations in Harford County recently notified employees that it would be closing plants and laying off workers amid fewer orders from car manufacturers and higher raw materials costs.

Collins & Aikman Corp. told 225 employees at its Havre de Grace plant, which makes injection-molded plastics for the interiors and exteriors of cars, principally for the Durango, that it will close March 3 unless a potential buyer or investor is found.

It is one of 11 plants Collins & Aikman plans to sell or close as part of a bankruptcy reorganization, said spokesman David Youngman. A small plant in Newark that employs about 40 people and supplies the Chrysler plant there is also on that list, he said.

While it might sound like a death knell for Newark's high-paying auto-manufacturing jobs, veteran James A. Wolfe isn't so sure.

After 40 years with Chrysler and 13 years as the general manager of the Newark plant, Wolfe has seen consumer demand turn on a pivot. And he thinks the public could change its collective mind again, in time to save the Delaware plant.

"We've got three years," he said. "It's important that we keep that work force here."

Now chief executive of the Delaware State Chamber of Commerce, Wolfe is a member of the delegation lobbying Chrysler and its president, Tom LaSorda, to preserve the jobs, which contribute $800 million a year to the local economy. Even Maryland offered support to try to preserve the Newark plant, which employs hundreds of state residents.

Aris Melissaratos, who stepped down as secretary of the Maryland Department of Business and Economic Development in January, said yesterday that he had sent multiple letters in support of the plant to the workers' union, United Auto Workers Local 1183, as well as to DaimlerChrysler executives.

"We thought it would be worthwhile to offer whatever help they were looking for, but we pretty much knew it was a hopeless case," Melissaratos said. "You've got to do that when it's a last-ditch situation like that."

The department couldn't offer financial incentives, Melissaratos said. But it did offer to retrain plant workers at Maryland community colleges - including the one in nearby Cecil County - in new technology platforms that could bring the plant up to more modern standards.

"That's what it would take to keep that plant alive," Melissaratos said.

In Cecil County alone, 450 residents stand to lose their jobs if the Newark plant closes, and 50 more from Collins & Aikman, said Vernon Thompson, the county's economic development director. While he anticipates that an expected surge in jobs in the defense, logistics and biochemical fields will offset the impact to the county's economy, displaced autoworkers will need job training to find new, good-paying jobs.

"It's a whole different ballgame," he said.

Chrysler said yesterday that it would ratchet down to a single shift in Newark this year, putting 700 employees out of work, along with about 400 on the supply-chain side, according to Delaware officials. Under the UAW contract, workers will be eligible to relocate to other Chrysler plants based on seniority. Those who do not might be eligible for job-retraining benefits from the state.

Including the employees from Collins & Aikman, a total of 750 Maryland autoworkers could be looking for jobs over the next three years, said Bruce England, executive director of the Susquehanna Workforce Network, which administers work force development programs in Cecil and Harford counties.

"One of the good things is it's 2009," he said of the plant's scheduled idling. "We're in a good labor market. We have a lot of employment opportunities. I'm sure we'll have a lot of businesses contacting us looking to hire them."

But the next year will be critical. The company cannot legally close a plant without negotiating with the union, hence the word idled, and the existing contract expires in September.

Wolfe, the former plant manager, said the facility, which opened in 1951 to manufacture Patton tanks, is flexible and has long served as an "overflow plant" for orders that other Chrysler factories aren't able to fill.

With Chrysler set to unveil 20 new products over the next two years, Wolfe hopes Chrysler will replace Durango and Aspen production there with something new, much the way GM did with another Delaware plant in danger of closing that now makes the popular Pontiac Solstice and Saturn Sky.

"The opportunity is there," he said.

But analysts said that was unlikely, especially given the cost of transporting parts and cars across the country to the bulk of the automaker's operations in the Midwest.

"I think you can assume it will be closed," said David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "They could do something else there, but it can't happen overnight."

Sun reporter Tricia Bishop contributed to this article.

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