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February 15, 2007
AUBURN HILLS -- Metro Detroit dodged a major plant closure in the Chrysler Group's massive restructuring, but the area will still bear the brunt of the automaker's job cuts.
Chrysler will slash more than 3,600 factory jobs in the Detroit area by eliminating a shift at its truck plant in Warren and cutting work at engine plants, stamping plants and other facilities.
Add to that the 2,000 salaried jobs Chrysler is getting rid of, most of them at its Auburn Hills headquarters, and Metro Detroit stands to lose more than 5,500 jobs -- 42 percent of the 13,000 the automaker will trim nationwide between now and 2009
It's more bad news for a state that has already suffered tens of thousands of job cuts as a result of restructurings at General Motors Corp., Ford Motor Co. and auto parts maker Delphi Corp. And it comes on the heels of drug maker Pfizer Inc.'s plan to slash 2,160 jobs in Ann Arbor, Plymouth Township and Kalamazoo by the end of 2008.
"We're starting to enter the darkest part of the tunnel," said Sean McAlinden, chief economist for the Center for Automotive Research. "You can't see the light behind you and you can't see that end-of-the-tunnel light in front of you."
A Chrysler summary obtained by The Detroit News details where the Metro Detroit cuts will be made:
* Warren Truck Assembly will lose one production shift and 1,000 jobs.
* Detroit Axle will lose 250 jobs and the Mack Avenue engine complex will lose 200.
* Trenton Engine will see 100 jobs cuts, while Sterling Stamping will lose 65 and Warren Stamping loses 100 positions.
* Nearly 1,000 hourly positions will be eliminated through increased efficiency at a variety of other locations.
* About 945 hourly jobs will be trimmed from Chrysler's Center Line parts distribution center and the DaimlerChrysler Technology Center, which houses mostly union-represented engineers and designers.
In addition, the 2,000 white-collar cuts will begin with 1,000 this year, followed by another 1,000 in 2008.
Detroit's Mack Engine complex escaped deeper cuts for now, but Chrysler acknowledged Wednesday that Mack's future is likely to be impacted by plans to build a new V-6 engine plant.
The automaker had hoped to announce Wednesday that the new plant would be built in southeast Michigan but was still finalizing details this week, according to one person familiar with the plan.
If there is a bright spot for Metro Detroit it is that the Jefferson North Assembly plant in Detroit stands to gain significant new work.
Analysts and company officials say future Durango SUVs, now built in Newark, Del., will be produced at the plant, which likely is in line for a major renovation in coming years.
Michigan takes hit
"This is another blow to Michigan," said Patrick Anderson of Anderson Economic Group in Lansing. "No question about it."
The massive auto industry cuts have torpedoed the state's housing market and put thousands of families at risk. Anderson said the state's median household income has gradually fallen from $47,433 in 2001 to $44,905 in 2004, according to the most recent U.S. Census.
While the state has seen a spike in employment in a few healthier sectors such as education, those gains haven't been enough to bolster the economy.
"If Michigan's economy was sound, we would re-absorb this kind of job cut in a year or two but Michigan's economy isn't sound," Anderson said. "Retail, wholesale and trade are losing. That's part of the problem. It's not just manufacturing."
State to offer help
In a statement, Gov. Jennifer M. Granholm called Chrysler's decision "market-driven in the face of tough global competition and the continued refusal of the Bush administration to advance American manufacturers' ability to compete or least keep the playing field level."
"We will be marshaling our resources to help those workers and continue our work with the company as it strengthens its business model," she said.
Michigan Congressman John D. Dingell said American autoworkers will continue to be caught in the fray of a competitive U.S. market so long as the "Japanese yen and other foreign currencies stay artificially low and American health care costs stay high."
State Sen. Majority Leader Mike Bishop, R-Rochester, called the Chrysler job cuts "the St. Valentine's Day massacre in our area. We'll suffer mightily for this."
'We're all affected'
Those in the industry view Chrysler's announcement as part of life in the competitive auto world.
"That's just the reality in Michigan, where we all work in the auto industry. If something goes on, we're all affected," said Evaristo Garcia, president of JATO Dynamics Inc. of Auburn Hills, a supplier to Chrysler.
Anthony Davis, a forklift driver at the Warren Truck plant with 14 years seniority, was stoic about the news as he walked to his car in the factory parking lot Wednesday morning.
"I feel for those (workers) who will be left out there unprotected," he said. "But this is the economy right now and we have to adjust. Everything is slowing down because of the trucks. We've had a good run and now we will just have to wait for another good run."
Considering slowing truck sales -- built at the plant -- and frequent temporary layoffs, the elimination of a shift came as little surprise to most workers. Some questioned why a third shift was added in 2004.
"We knew something was going to happen," said Carl Shows, a head lamp installer. "I though the third shift was in excess when they added it on, but it's their company."
Employees learned of the layoffs during town hall-style meetings at the factory.
"The mood in the plant will be kind of shaky for a lot of guys," Shows said. "There is not a lot of seniority in this plant. There are a lot of new guys who have been transferred here from other plants like Trenton, Mack and Sterling."
Shows hoped his eight years of seniority would spare him.
"It's unfortunate for those who don't have enough time in to hang around," he said. "I don't know where I'm going to end up but I should be alright."
The pain from the layoffs will extend beyond the factory's walls, said Debra Morton, an assembler in the body shop of Warren Truck.
"It's not good news for Michigan at all," the Centerline resident said. "It's going to have a trickle down effect. It's really hard on families when there are job cuts, loss of benefits, health and dental care."
She said the cutbacks were not a surprise.
"It's been like a rolling layoff for quite some time now."
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