Wednesday, October 10, 2007

A UAW strike at Chrysler LLC would damage the launch of the carmaker’s critical new minivans.

The union is threatening to strike Chrysler at 11 a.m. today unless it can resolve remaining issues in contract talks that accelerated last week. Negotiations are continuing.

The UAW reached a tentative agreement with General Motors on Sept. 26. Rank-and-file ratification of the GM contract is expected to be completed Wednesday.

Canadian Auto Workers President Buzz Hargrove said today that a UAW strike would shut Chrysler’s Windsor, Ontario, minivan plant within 24 hours. Chrysler also makes minivans in St. Louis.

Chrysler has redesigned the 2008 Dodge Grand Caravan and Chrysler Town & Country minivans for launch this fall. They are among the automaker’s most popular and profitable vehicles, Hargrove said.

“A strike would be devastating for Chrysler,” says Hargrove, who added that the minivans are just reaching full production. The CAW's contract with Chrysler doesn't expire until next year.

The CAW represents about 9,000 Chrysler workers at two Ontario assembly plants and a casting plant. The Windsor assembly plant makes the minivans and Chrysler Pacifica crossover. An assembly plant in Brampton, Ontario, produces the Chrysler 300 sedan, the Dodge Magnum and the Dodge Charger.

Hargrove said the Ontario plants are so dependent for parts on U.S. Chrysler plants that they would be forced to close within a day of a strike.

The UAW is negotiating a new master contract on behalf of about 49,000 active hourly Chrysler workers. The previous four-year contract expired Sept. 14.

The UAW and Chrysler have been working under a contract extension since then, though the UAW over the weekend told Chrysler that it would strike Wednesday unless an agreement was signed.

Chrysler cannot afford to have its minivan production stalled, says Erich Merkle, vice president of forecasting for consulting firm IRN Inc. in Grand Rapids, Mich.

Chrysler has been touting the redesign of the 2008 Dodge Grand Caravan and Chrysler Town & Country.

The vehicles feature several innovations, including a new Swivel ’n Go seat system that allows second-row seats to turn 180 degrees to face rearward. They also have a more muscular stance, a new 4.0 liter V-6 engine and a six-speed transmission.

Windsor produced 22,382 minivans in September, while St. Louis produced 4,043 during a month of ramp-up. Chrysler sold 446,578 minivans in North America in 2006.

Merkle said other than the minivans, Chrysler probably could absorb a two-week strike without extensive damage. The company is temporarily idling five assembly plants and one engine plant as it culls excess inventory.

Chrysler spokeswoman Michele Tinson declined to comment on the potential of a strike.

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