Monday, December 8, 2008

Chrysler submits restructuring plans for Canada

RP news wires

In response to a joint letter from the Honourable Tony Clement, Minister of Industry, and the Honourable Michael Bryant, Economic Development Minister for Ontario, Chrysler Canada submitted its detailed operational and restructuring plan on December 5 to both ministers. Federal Minister Tony Clement and Ontario Minister Michael Bryant had sought further information to support Chrysler Canada's request for assistance.

In its submission, Chrysler Canada provided an overview of its Canadian operations, its impact on the Canadian economy and its plan for long term viability. This information was supplemented with information submitted to the United States Government earlier in the week.

According to Reid Bigland, president and CEO of Chrysler Canada, “Our request for a temporary and fully repayable loan from the Ontario and Canadian governments is really two-fold. First, to ensure Chrysler has sufficient funds to complete our restructuring activities during what is an unprecedented downturn in vehicle sales caused by the global financial crisis and second, to ensure Chrysler Canada's substantial Canadian manufacturing and operational footprint is protected.”

Chrysler Canada is a major Canadian corporate citizen. The company has been, and will continue to be, a mainstay of the Ontario economy. Nevertheless, challenges within the global economy in general and the automotive industry in particular present significant obstacles which Chrysler Canada must surmount in order to remain a vibrant pillar of the Canadian and Ontario economies. As a predominantly NAFTA-based manufacturer and distributor, Chrysler is facing continued risk with the tightened credit markets and the resulting slumping auto industry.

During the first six months of 2008, Chrysler was on target with respect to its recovery and transformation plan. In July 2008, prior to the full onslaught of the global credit crisis and the company's forced withdrawal from the leasing market, Chrysler Canada had experienced 23 consecutive months of year-over-year sales growth – unprecedented in the history of the company and notwithstanding the restructuring initiatives throughout the same period.

The global credit crisis intervened, creating a liquidity crisis that reduced or eliminated customers’ access to credit, leading to a dramatic and historical downturn in North American vehicle sales, and placed the company's restructuring plan in jeopardy.

Chrysler’s strategic plan is three-fold:

· Reduction of fixed costs

· Investment in new vehicles and technologies

· Formation of strategic alliances and partnerships

This year, Chrysler Canada celebrated its 83rd year as a senior member of Canada’s industrial community. During the last eight decades, the company has grown from 181 employees to the current 9,800 employees making Chrysler Canada one of the largest employers in Ontario and Canada, and in particular the communities of Brampton and Windsor.

For every employee at Chrysler Canada, the company supports more than one retiree. Retirees now exceed 13,000 Canadians who draw direct retirement benefits from Chrysler Canada.

The financial support of the current and former employees of Chrysler Canada, and their families and dependants, make up a population of more than 50,000 Canadians who rely on the health and well-being of Chrysler Canada.

Chrysler Canada’s network of 454 Chrysler, Jeep and Dodge dealers across Canada employs more than 24,000 Canadians.

Chrysler Canada is headquartered in Windsor. The company operates vehicle assembly plants in Brampton and Windsor, Ontario and a casting plant southwest of Toronto. Collectively, the plants assemble more than half a million vehicles a year of which 86 per cent are exported to the United States. For the past several years, the assembly plants have supported three shifts, although recently a shift was eliminated at Brampton Assembly Plant to adjust production to the current reduced sales levels in the U.S. market. The Windsor Assembly Plant, the largest plant in the Chrysler manufacturing network, still supports three shifts.

Chrysler Canada's award-winning research and development centre, located in Windsor, is a partnership with the University of Windsor and has provided engineering support for design analysis and testing for more than 20 years. The University of Windsor/Chrysler Canada Automotive Research and Development Centre has led and supported many advanced technology development programs such as propane fuelled vehicles, natural gas powered vehicles and electric vehicles.

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