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NINETY EIGHT REGENCY

Chrysler cuts four models, five shifts

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Chrysler cuts four models, five shifts

Up to 10,000 hourly jobs and 1,000 salaried jobs being cut; overtime eliminated

Bradford Wernle

Automotive News

November 1, 2007 - 10:20 am ET

DETROIT -- Chrysler LLC, ending days of speculation, said today it will slash 8,500-10,000 hourly jobs before the end of 2008 and cut four vehicles from its lineup as it restructures under the ownership of Cerberus Capital Management LP.

Another 1,000 salaried jobs also are being cut along with about 37 percent of its contractors, the company said. Chrysler will also eliminate hourly and salaried overtime.

Chrysler will drop shifts at Belvidere (Ill.) Assembly, Jefferson North in Detroit, Toledo North, Brampton (Ont.) Assembly, Sterling Heights (Mich.) and Mack Avenue Engine Plant II in Detroit.

Chrysler will cut the Dodge Magnum, the Chrysler PT Cruiser convertible, the Chrysler Pacifica crossover and the Chrysler Crossfire convertible.

In the same time frame, Chrysler said it will add two all-new products to its portfolio: the Dodge Journey crossover and Dodge Challenger coupe, along with two new hybrid models, the Chrysler Aspen and Dodge Durango SUVs.

“The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint," Chrysler CEO Bob Nardelli said in a prepared statement.

PRESS RELEASE: Chrysler Announces New Plans to Balance Supply and Demand

* Industry-wide volume reduction and sales slow down requires plant adjustments.

* Four products will be cancelled from Chrysler line-up; while adding two all-new products and two hybrid models.

Chrysler LLC today announced that it would make volume-related reductions at several of its North American assembly and powertrain plants, and eliminate four products from its line-up.

Shifts will be eliminated at five North American assembly plants which, combined with other volume-related manufacturing actions, will lead to a reduction of 8,500-10,000 additional hourly jobs through 2008.

Additional actions include reductions of salaried employment by 1,000 and supplemental (contract) employment by 37 percent. The Company also plans to eliminate hourly and salaried overtime and reduce purchased services due to reduction in volume.

The volume-related actions are in addition to 13,000 jobs eliminated by the three-year Recovery and Transformation Plan (RTP) announced in February. The objectives of the RTP remain the same.

"The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint," said Bob Nardelli, Chairman and Chief Executive Officer. "Annual industry volume (U.S. market) then was running at a 17.2 million clip. Now, we expect a seasonally adjusted annual volume for 2007 to be significantly lower and carry over into 2008."

"We have to move now to adjust the way our company looks and acts to reflect a smaller market," added Tom LaSorda, Vice Chairman and President. "That means a cost base that is right-sized and an appropriate level of plant utilization."

LaSorda added that third-shift operations at assembly plants usually reflect a high demand after a product is launched. Three of the five plants affected by this action are the result of elimination of third shifts" in Belvidere, Illinois; Toledo, Ohio, and Brampton, Ontario.

In contract negotiations just concluded with the United Auto Workers, Chrysler committed to spending more than $15 billion on products, plants and engineering during the life of the contract through 2011.

The company announced that it will eliminate four models through 2008, including Dodge Magnum, the convertible version (only) of Chrysler PT Cruiser, Chrysler Pacifica and Chrysler Crossfire. In the same time frame, Chrysler will add two all-new products to its portfolio: the Dodge Journey and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango.

"These actions reflect our new customer-driven philosophy and allow us to focus our resources on new, more profitable and appealing products," added Jim Press, Vice Chairman and President. "Further, these product actions are all in response to dealer requests."

Manufacturing Actions

Chrysler will eliminate shifts at five assembly plants, and take further volume-related actions at several other facilities. It will:

Drop third-shift operations at Belvidere (Ill.) Assembly Plant in the first quarter 2008. Belvidere builds the Dodge Caliber, Jeep Patriot and Jeep Compass.

Drop second-shift operations at its Jefferson North (Detroit, Mich.) Assembly Plant in the first quarter 2008. It's expected that the plant will return to two shifts in first quarter 2010 with the introduction of the next generation of sport-utility vehicles. The addition of a third shift will remain an option, depending on market demand. Jefferson North builds the Jeep® Grand Cherokee and Jeep Commander.

Drop third-shift operations at the Toledo (Ohio) North Assembly Plant in the first quarter 2008. Toledo North builds the Jeep Liberty and Dodge Nitro.

Drop third-shift operations at Brampton (Ontario) Assembly Plant in first quarter 2008. Brampton will build the Chrysler 300, Dodge Charger and Dodge Challenger. The Dodge Magnum will be discontinued.

Drop second shift operations at Sterling Heights (Mich.) Assembly Plant in first quarter 2008. Sterling Heights builds the Dodge Avenger and Chrysler Sebring sedans and Chrysler Sebring Convertible.

In addition, Mack Avenue (Detroit) Engine Plant II will return to a traditional two-shift / two-crew operation in the first quarter 2008 after operating on a three-crew, two-shift, 120-hour-per-week (3/2/120) schedule. Mack II builds the 3.7-liter V-6 engine.

"I'm confident that we have the right team in place and a business plan that doesn't need to be re-written," concluded Nardelli. "Like all good plans, the RTP has built-in flexibility that allows us to stay one step ahead of market change. And that is the way to long-term sustained profitability."

For more information, go to the Chrysler media site at http://media.chrysler.com.

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oh f@#k. My friend is an eng/supervisor on midnights at Brampton. Hopefully they like him enough to keep him on at another shift :(

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Like WTF??? They cut the Magnum which is cheap to manufacture anyways b/c of euro 300 Wagon... They don't cut the Aspen or Commander but did cut the Pacifica which arguably had more potential???

I guess stupid decisions continue at Chrysler.

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let's cut the magnum, but we'll start building a 2 door coupe (which is in SO much demand).

idiots.

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The Magnum isn't selling in big numbers, and the Challenger will be "pushed".

Besides, I already bought a new Magnum.

LOL

Fiscal responsibility is gonna come closer to the front with the new ownership. Time will tell.

:AH-HA_wink:

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I am gonna miss the Magnum- easily the best-looking modern wagon bar none. Is the timetable for this the same as that for the jobs: by the end of '08? Plus if they are selling slow- perhaps they'll be around in stock thru the end of '08; I have to replace the wife's ride in that same timeframe and I would strongly consider a Magnum.

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well production third shift will be cut in the first quarter of 08, so I'd imagine thats when the magnum dies too.

they'll still be doing maintenance on 3rd shift though

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so they only cut the PT Convertible and not the entire PT line itself. That's good to hear.

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i drop the kid off at daycare everyday, which is right by the chrysler and ford dealers.

salesdude drove by yesterday morning in a black SRT-8 Magnum.

very nice.

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If it's selling slow, kill it. Makes sense.

I guess the Aspen and the Durango are staying so Chrysler can try out the hemi hybrid?

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That is my guess about the Durango/Aspen Raven. Its too bad about the Magnum. I really like the new design on the Magnum. I think its a great car, but if the sales aren't there then its only right to kill it.

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PT Cruiser Convertible: No surprise there.

Crossfire: Again, no big surprise. I am a little confused by the reports I have read. Some reports specifically state that either the convertible or coupe is the only version going and some reports have worded the news as if both versions are cancelled.

Magnum: Sad, but if it's not selling, then I guess it must go. It seems like a waste since they just spent money giving it a mild restyling. I like the model name and hope to see it used again on something great.

Pacifica: A great idea with bad execution? Crossovers are a hot segment right now. What is it about this vehicle that makes it such an underachiever? I would love to see Chrysler offer a pair (midsize and large) of competitive near luxury crossovers that would set the market (and Chrysler brand sales) on fire.

I guess they decided to keep the Aspen since they wasted money to put a hybrid in the thing. I think they could do just as well testing the hybrid in the Durango only. I think the truck based luxury SUV fad has passed (as well as the SUV fad in general) and Cadillac has a tight monopoly on the remains of that market.

I am surprised that the Commander is not on this list. From what I understand, it has performed poorly and has also devoured Grand Cherokee sales.

I still think the Compass should go. It weakens Jeep's brand image and overlaps with the Caliber.

I still think they should kill the Sebring sedan and just offer the convertible (soft and hardtop) versions. The sedan is style-challenged and just pulls the Chrysler brand down. The Sebring convertible looks better and does not overlap with any products offered by other Chrysler LLC brands. I think Chrysler should produce a rear wheel drive midsize sedan and coupe-cabrio built on a shortened version of the next generation 300 platform (call it LeBaron or Concorde; I think the Sebring name is too damaged at this point to apply it to this vehicle). Offer all wheel drive as an option for those who live in colder climates. When this car comes to market, the Sebring convertible could then be eliminated.

I would also stretch the Sebring platform to an even 110 inch wheelbase and redesign a second generation Cruiser (drop the "PT") on this platform (5-door hatch/wagon model only; the convertible is currently dead and should stay that way). It would give the vehicle more utility and create a more upscale entry car for the Chrysler brand (as well as provide a platform mate for the next generation Avenger). The interior and exterior styling should be both upscale and retro. I would offer the turbocharged 2.4 liter 4 cylinder engine from the Caliber SRT4 (with a six speed automatic) as standard equipment. Hybrid and diesel engines could be offered as optional upgrades. I think there is still market interest and equity in this type of vehicle. It just needs a great redesign to regenerate interest and move it upmarket to fit in with the upscale position that the Chrysler brand needs to assume.

As far as the compact Caliber platform, I would like to see Dodge stretch it to an even 106 inch wheelbase and design a collection of sporty, competitive compact variants on this platform to rival products from Scion (as well as Toyota, Honda, Nissan, and Mazda). I would like to see them offer a sedan, coupe, and 5-door hatchback as well as morph the second generation Caliber into a proper compact crossover (right now the Caliber looks like it kind of straddles the line between hatchback and crossover).

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Cut the Magnum and Pacifica, two of the best cars Chrysler makes, but keep the Aspen and Compass? Wow.

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Yes, lets cut the Magnum, which is cheap to produce since they have the 300 Touring in other markes. Let's cut the only wagon in the Chrysler lineup, or Domestic lineup for that matter (Maxx is defuct, Taurus X is a CUV). Sales were up this month too. As Bathazar said, the Magnum is easily the best looking modern wagon, bar non. I will mss it and I find this move very stupid.

Want to eliminate brand overlap? Cut the Compass and Partriot, which not only overlap each oher and the Caliber, but water down the Jeep image.

Oh, and getting rid of the Chrysler CUV instead of the badge engineered, gas hogging Durango? Smart. <_<

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Yes, lets cut the Magnum, which is cheap to produce since they have the 300 Touring in other markes. Let's cut the only wagon in the Chrysler lineup, or Domestic lineup for that matter (Maxx is defuct, Taurus X is a CUV). Sales were up this month too. As Bathazar said, the Magnum is easily the best looking modern wagon, bar non. I will mss it and I find this move very stupid.

Want to eliminate brand overlap? Cut the Compass and Partriot, which not only overlap each oher and the Caliber, but water down the Jeep image.

Oh, and getting rid of the Chrysler CUV instead of the badge engineered, gas hogging Durango? Smart. <_<

No matter how much you or anybody here likes the Magnum.....did you buy one?? I think one person here has one. Americans don't buy large wagons. The G8 wagon will fail here as well.

I don't know why everyone thinks that Chrysler can just "get rid" of their only large SUVs? :stupid: They need a large family vehicle that can tow a good amount of weight. I don't think the Jeep Commander or GC can tow as much as a Durango or Aspen. Why is the Aspen so horrible?......is it because it's a rebadge??....so are the Tahoe and Yukon. The Aspen and Durango share the same exterior parts as the Tahoe and Yukon do. I will admit that the Durango and Aspen are overdue for an "all new" redesign, but that doesn't mean getting rid of both of them. No matter what, people will still buy large SUV's....just not in the same quantity as in the past. Why get rid of a nicer appointed Chrysler version, when it can be built along side of the Durango for very low cost? They just need to differentiate them more when they redesign them....and I'm mainly talking about interiors.

Also, many people seem to be advocating the combining of the next Durango and a Jeep large SUV.....but won't those same people end up complaining about the watering down of Jeep? They will have to make compromises to make both a Dodge mostly road going SUV, and a fully Trail Rated Jeep, on the same platform. This is what's know as the "Jeep Curse". Every manufacturer that owned Jeep has gone under. They are constantly fighting the battle between making Jeep appeal to a mass market, but not being allowed to make watered down Jeeps that aren't Trail Rated....and now that they finally did, they are being crucified by anyone and everyone in the media.

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No matter how much you or anybody here likes the Magnum.....did you buy one?? I think one person here has one. Americans don't buy large wagons. The G8 wagon will fail here as well.

I don't know why everyone thinks that Chrysler can just "get rid" of their only large SUVs? :stupid: They need a large family vehicle that can tow a good amount of weight. I don't think the Jeep Commander or GC can tow as much as a Durango or Aspen. Why is the Aspen so horrible?......is it because it's a rebadge??....so are the Tahoe and Yukon. The Aspen and Durango share the same exterior parts as the Tahoe and Yukon do. I will admit that the Durango and Aspen are overdue for an "all new" redesign, but that doesn't mean getting rid of both of them. No matter what, people will still buy large SUV's....just not in the same quantity as in the past. Why get rid of a nicer appointed Chrysler version, when it can be built along side of the Durango for very low cost? They just need to differentiate them more when they redesign them....and I'm mainly talking about interiors.

Also, many people seem to be advocating the combining of the next Durango and a Jeep large SUV.....but won't those same people end up complaining about the watering down of Jeep? They will have to make compromises to make both a Dodge mostly road going SUV, and a fully Trail Rated Jeep, on the same platform. This is what's know as the "Jeep Curse". Every manufacturer that owned Jeep has gone under. They are constantly fighting the battle between making Jeep appeal to a mass market, but not being allowed to make watered down Jeeps that aren't Trail Rated....and now that they finally did, they are being crucified by anyone and everyone in the media.

Tell me something: how stupid is it to be bringing a full size, BOF SUV that gets poor fuel economy to market at a time when gas prices are increasing, the SUV market is shrinking, the CUV market is expanding, and they drop the one large-ish CUV they have. The whole point of this product cutting was to "eliminate overlapping models" right? Well the Aspen overlaps the Durango which is it so closely based one, and the Compass overlaps the Patriot, which to a lesser extent overlaps the Caliber. The Compass is selling poorly and so is the Aspen. I know the Pacifica is long in the tooth but still, there is only need for one full size SUV in the lineup. The Commander, while I have no problems with, also sells poorly and is out of place in today's market.

Edited by Dodgefan
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Yes, lets cut the Magnum, which is cheap to produce since they have the 300 Touring in other markes. Let's cut the only wagon in the Chrysler lineup, or Domestic lineup for that matter (Maxx is defuct, Taurus X is a CUV). Sales were up this month too. As Bathazar said, the Magnum is easily the best looking modern wagon, bar non. I will mss it and I find this move very stupid.

you can't say the the magnum is cheap to produce because the 300 Touring is sold in other markets because those 300 wagons' arne't made in Brampton, they are made in Austria so production costs aren't directly tied.

sales may be up but they are still pretty low to where they used to be. As much as I love it and will miss it, I'm not blinded to the fact it was a niche vehicle and once the initial rush to get them was over, the demand understandably dropped off a lot and its hard to imagine that it will jump back up that much.

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Face the facts that Chrysler missed the boat on SUVs and their current attempts to play in the market are feeble at best. The Aspen, Nitro, and Commander may - may - have worked out in the late-90s when any pile of crap that sat up high had attention in the market, but not today.

Today's market can only sustain large SUVs that are worthwhile. The Suburban, Expedition, Tahoe, Yukon, Land Cruiser, Pathfinder, Grand Cherokee, 4Runner, Land Cruiser, G-Wagen, Escalade, and Navigator are the only ones guaranteed a free pass in today's world because they've all been there, done that, and proved themselves meritorious in some regard. Everything else - and I mean everything - that's not softened and car-based can be gone tomorrow and no one would care. Chrysler killed their only chance when they turned the attractive and sporty original Durango into the bloated characiture that it is today.

Who would've thought a decade ago that the Blazer and Explorer might die, at least in their current forms?

What makes anyone think the Aspen - as poorly executed as it is - is worthy of survival?

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Okay...

So Chrysler has 2 Dodge vehicles that sell to a similar market: the Durango and the Magnum and then they are also introducing the Journey (Isn't it roughly the same size --- I could be way off base here)

The Durango probably sells more, offers 4WD and has huge investments and plans for the BMW/GM/DCX hybrid system. The Journey is hitting the market in a niche that is hot now and 'offers more utility' than the Magnum as well as a better image to some. So maybe they figure they can shift Magnum sales to Journey and Durango?

The Magnum is very cool, but let's face it. wagons still have a bad image and for all intents and purposes the Magnum is an enthusiasts car bought by enthusiasts for the most part. The other side of that is; most of these enthusiasts might opt for a Challenger when it comes out as well which would leave the Magnum at an even lower sales pace.

I never thought they'd phase it out though and I love the car.... Maybe they'll surprise us with a wagon version of the new Charger or something in a few years (i.e. It just won't be called Magnum)

:twocents:

Edited by FUTURE_OF_GM
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The Journey will for all intents and purposes replace the Magnum as a midsize CUV. Too bad we don't get the good powertrains Europe gets. More 2.7ls for us.

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I do hope they bring the Magnum name back, it's one of my favorite vehicle names. All I wonder, is that, why they bothered to MCE it if they're gonna discontinue it next year. Unless it was a last minute kind of decision.

Oh well, I guess I can look for one used when I have the money for one.

The Journey will for all intents and purposes replace the Magnum as a midsize CUV. Too bad we don't get the good powertrains Europe gets. More 2.7ls for us.

The European Journey gets the 2.7 also, but it's mated to a 6-speed. Another example of the US getting the short straw. <_<

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All I wonder, is that, why they bothered to MCE it if they're gonna discontinue it next year. Unless it was a last minute kind of decision.

I imagine the MCE was a decision made a while back under the DCX regime, while the axing was a Cerebus decision

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Who would've thought a decade ago that the Blazer and Explorer might die, at least in their current forms?

Me.

LOL

Both were not the greatest, being politically correct.

The Blazer recieved the prestigious "most dangerous vehicle on the road" award from many sources towards the end of it's life. That's not a great selling feature....

;)

http://www.consumeraffairs.com/news04/2005/iihs_safest.html

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Me.

LOL

Both were not the greatest, being politically correct.

The Blazer recieved the prestigious "most dangerous vehicle on the road" award from many sources towards the end of it's life. That's not a great selling feature....

;)

http://www.consumeraffairs.com/news04/2005/iihs_safest.html

I completely agree, but I think his point was that they sold extremely well. It's like saying the Camry will be on its death bed ten years from now. Would someone really put their money on that? Edited by blackviper8891
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