Chrysler to lay off 1,096 at Belvidere

By Rick Popely |Tribune staff reporter

January 3, 2008

Chrysler LLC will lay off 1,096 workers at its Belvidere, Ill., assembly plant starting Jan. 31, as it eliminates a third shift to combat falling sales.

The automaker announced Nov. 1 that it would eliminate the shift in the first quarter but did not specify then how many workers would lose their jobs or when layoffs would start. Chrysler revealed the number in a required state filing Wednesday.

Chrysler is eliminating shifts at four other plants and will cut as many as 12,000 jobs in North America this year as it tries to return to profitability under the ownership of private-equity firm Cerberus Capital Management. At Belvidere about 600 temporary employees who are members of the United Auto Workers but who do not have job protection rights will be among those who will lose their jobs. Permanent employees will be laid off based on lowest seniority and could be recalled.

Chrysler spokeswoman Michelle Tinson said the automaker also is in discussions with UAW Local 1268 at the plant about offering buyout and retirement incentives.

Officials from UAW Local 1268 could not be reached for comment Wednesday.

The plant, east of Rockford along Interstate Highway 90, employs about 3,800 and builds the Dodge Caliber and Jeep Compass and Patriot, sales of which have slowed in recent months. The plant will operate on two 8-hour shifts after the layoffs, Tinson said.

Until the Belvidere plant received a $419 million renovation in 2005 to build the three current models it operated on a single shift and employed 1,650. A second shift and about 1,000 workers were added early in 2006, and the third shift and another 1,000 workers started in July 2006.

Chrysler does not give production forecasts, but CSM Worldwide estimates that Chrysler's first-quarter output will be 15 percent lower than last year's. CSM Worldwide forecasts first-quarter production cuts of 11 percent at General Motors Corp. and 7 percent at Ford Motor Co.