Thursday, December 13, 2007

Chrysler minivan plant will close for 2-1/2 weeks


Chrysler is planning to close its minivan plant in Fenton for 2 1/2 weeks in January due to lagging sales, an official from the local United Auto Workers union confirmed Wednesday.

The minivan plant had been scheduled to return from a planned holiday break Jan. 2, but it will remain idled until the week of Jan. 21, according to Ben Harman, legislative chair for UAW Local 110, which represents employees at the South Assembly plant.

Chrysler does not comment on its production schedules more than a week ahead because the plans often change.

The company also plans to idle its North Assembly plant in Fenton, where about 1,800 people work assembling the Dodge Ram pickup. An official from a different UAW local said last week that plant workers were rescheduled to return to the North plant Jan. 28. About 2,890 employees at the South plant assemble the Dodge Grand Caravan and several international versions of Chrysler's minivans. However, only about 1,468 employees will return when the plant reopens next year, as the company is cutting its second shift indefinitely.

Through Dec. 1, the South plant had assembled 21,978 Town & Country minivans and 105,785 Grand Caravans and Caravans in 2007, according to Harbour Consulting of Troy, Mich..

Chrysler also reportedly plans to idle its minivan plant in Windsor, Ontario, for two weeks.

The automaker will shut the Windsor plant on Jan. 14. In addition, Chrysler would also shut down its Jefferson North plant in Detroit. The Jefferson plant is home to the Jeep Commander and Grand Cherokee.

Analysts say the company is making cuts to avoid overproducing in the face of falling sales. Combined sales for Chrysler's minivans were up 1 percent in November from the same month a year ago, but sales for the year were down 19 percent through November.

Harbour's production figures for the year show the South plant is on pace for a 28 percent decline from the 193,251 vehicles it made a year ago.

Meanwhile, the company's Windsor plant, which produces the Chrysler Town & Country and the Dodge Grand Caravan, is on pace to make about 211,164 minivans — 30 percent more than it did a year ago.

Even with contracting sales and production that appears to be shifting to Canada, there's little cause for local employees to be nervous, said Greg Gardner, communications manager for Harbour Consulting.

Though manufacturing efficiently is key in tough times, Gardner doubted that Chrysler could produce all its minivans in Windsor. He also pointed to several other plants where Chrysler's owner, private equity firm Cerberus Capital Management, has shown it is willing to operate single-shift plants, which are generally less cost-efficient than plants that work on two or three shifts.

"This company can make decisions quickly, but minivan demand will be greater than what one plant can produce," Gardner said.

"They can't meet demand out of one plant unless they decided they're going to cut volume and compete on price. There's no short-term option that would result in the van plant closing."

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