| Windsor plant could close. 2,000 jobs at risk: DaimlerChrysler van plant 'likely target,' sources say Financial Post - December 2, 2000 By Thomas Watson DaimlerChrysler AG's van assembly plant in Windsor, Ont., which employs 2,000 workers, is a "likely target" for permanent closure as part of the struggling automaker's North American restructuring plan, according to internal sources. Earlier this year, the company announced it would invest $1.5-billion to revamp its Pillette Road facility to build a new Dodge vehicle. Since then, however, plans for certain vehicles have been killed, including a SUV that insiders say was the Dodge to be built in the retooled van plant. As a result, industry watchers say the Windsor facility is one of three North American plants that could be closed as part of a reorganization being developed by Dieter Zetsche, Chrysler's new German chief executive. Former company chief James Holden and other top U.S. executives were ousted earlier this month by Juergen Schrempp, the Daimler chairman, who is facing shareholder revolts on both sides of the Atlantic over Chrysler's mounting losses and the rocky state of its two-year-old marriage to Daimler-Benz. Also yesterday, Ford Motor Co. revealed plans to further cut production in the United States and announced per-share earnings will fall about 9.6% in the fourth quarter. Earnings will decline to about US75¢ a share from the year-earlier US83¢ The closing of the Pillette plant, where Chrysler makes a soon-to-be-discontinued line of vans, is a real possibility, according to David Healy, an Arizona-based analyst with Burnham Securities Inc. "That's a reasonable analysis of the options Chrysler is looking at," he said. "What they will do, in fact, I don't know." Canadian auto union boss Buzz Hargrove met with Mr. Zetsche earlier this week. He warned the German to keep his hands off Canada, and told him he expects the company to proceed with the Pillette expansion, which is under construction. But Mr. Hargrove got no promises. The official word from DaimlerChrysler Canada is that nothing has been decided about restructuring in Canada. But sources within the company told the Financial Post yesterday "the reality is the Pillette facility is a likely target." If the plant is closed, it would be the first Canadian plant shutdown of its kind at Chrysler since 1980, when the automaker shut a Windsor engine facility, affecting more than 1,000 employees. In addition to closing at least one plant, Mr. Zetsche is expected to keep trimming production, cut development plans for new vehicles, attempt to introduce more flexible production techniques and lay off about 20,000 employees next year. Yesterday, he tapped the brakes on production for the second time since being put behind Chrysler's steering wheel. In December, Chrysler will trim production by closing eight North American plants for a week, including the Pillette Road operation and a sedan plant in Brampton, Ont., which employs 4,200. It will be the third idling of the Brampton plant in recent weeks. The company has also cut hours at its minivan plant in Windsor, which employs 6,400 people. Mr. Zetsche's order to throttle back output was expected as he faces the difficult challenge of turning around Chrysler -- which posted a third-quarter loss of US$512-million -- at a time when the overheated North American auto industry is experiencing a much-anticipated slowdown. In November, U.S. sales at General Motors Corp. dropped 8.4% from a year ago, while Ford Motor Co. saw its November sales drop 8.2% south of the border. Last month's U.S. sales at Chrysler fell only 5.5%, but analysts noted the company is still offering the highest rebates in the industry. The Canadian auto industry remains on track to set a new sales record this year. Nevertheless, General Motors of Canada Ltd.'s November sales dropped 8.4%. Ford Motor Co. of Canada Ltd. reported a 3% decline and November sales at DaimlerChrysler Canada dropped 15%. twatson@nationalpost.com |