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Chrysler downsizing to affect 8 Midwest plants

The fallout from Chrysler's big downsizing announcement will hit eight factories in addition to the three initially identified by the company.
/ Source: The Associated Press

The fallout from Chrysler's big downsizing announcement will hit eight factories in addition to the three initially identified by the company.

The eight plants, in Michigan, Ohio and Indiana, make components that go into slower-selling mid-sized sport utility vehicles, pickup trucks and other large vehicles on which Chrysler plans to cut production through 2009.

The Chrysler Group, which had an operating loss of $1.475 billion in 2006 and expects to show losses through 2007, announced Wednesday that it would eliminate 13,000 positions, including 11,000 production jobs and 2,000 white-collar posts, as it seeks to cut costs and return to profitability in 2008.

Of the production job cuts, 9,000 are in the U.S. and 2,000 are in Canada.

Chrysler, part of Germany-based DaimlerChrysler AG, said Wednesday it plans to close the Newark, Del., assembly plant during the next two years and cut shifts at plants in Warren, Mich., and St. Louis. The company also announced that a parts distribution center which employs 100 workers near Cleveland also will close this year.

On Thursday, company officials said much of the impact would be in southeastern Michigan, where 5,300 people will lose their jobs by 2009.

In Michigan, the hourly job cuts include 1,000 positions when the shift is eliminated at the Warren truck plant, plus 250 jobs at a Detroit axle plant. About 200 more jobs would be lost at the Mack Avenue Engine Plant I in Detroit, another 100 at an engine factory in suburban Trenton, 65 more at a stamping plant in Sterling Heights and another 100 at a stamping plant in Warren.

Another 1,000 Michigan jobs will go as Chrysler explores selling support businesses that don't fit its core car-building mission, and 1,000 will be lost due to productivity improvements, said company spokesman David Elshoff. Where those job cuts will occur has not been determined yet, he said.

In addition, about 1,600 of the 2,000 white-collar layoffs will come at the company's Auburn Hills headquarters, Elshoff said.

In Ohio, about 200 jobs will be eliminated at the Toledo machining plant and another 110 at a stamping plant in Twinsburg, near Cleveland.

One Indiana plant, Indiana Transmission Plant I in Kokomo, would lose 100 jobs this year, said Chrysler spokesman Mike Aberlich.

The layoffs at the eight plants are part of the 11,000 production jobs that Chrysler announced it would cut on Wednesday. All the cuts will take place during the next three years, and will be accomplished with buyouts and early retirement packages that are under negotiation with the Canadian and U.S. auto workers' unions.

The closures and reductions announced by the company leave about 4,000 job cuts at yet-to-be determined plants, Aberlich said. The company will pick those plants and jobs later based on productivity and other factors, he said.

The Delaware plant, which employs about 2,100 people, makes the slow-selling Dodge Durango and Chrysler Aspen mid-sized sport utility vehicles. Chrysler would not say where those products will be built, or if they will be built, after the plant closes in 2009.

The SUVs are based on the Dodge Ram pickup platform and could be made at plants in Warren, Mich., Fenton, Mo., or Saltillo, Mexico, Aberlich said.

"The only scenario isn't to cancel it," he said.

SUVs in general have seen falling sales in the past year due to high gasoline prices as consumers shift to more fuel-efficient models, and analysts say auto companies would be wise to shift their efforts to new car-based vehicles that get better gas mileage.

On the plus side, Chrysler plans to double capacity of its new four-cylinder engine plant in Dundee, Mich., north of Toledo this year. About 480 people, including parts supplier employees, now staff the plant, said Chrysler spokesman David Elshoff.

That could grow to around 550 by 2009 as the plant grows to its capacity of making 840,000 engines, he said.