Workers atGroup’s assembly plant in Brampton, ON, Canada, have thrown a monkey wrench into the embattled auto maker’s long-term product plans.
Brampton workers rejected a company proposal that asked them to forfeit C$134 ($115) per week in return for the contract to build a vehicle, dubbed ‘Product X’ for purposes of the vote.
However, Ward’s learns the vehicle is the contentiousImperial sedan, and production is targeted for 2010.
The wages in question represent extra pay negotiated by the Canadian Auto Workers union as compensation for concessions such as shortened break times, which were necessary to accommodate the plant’s transition to three 8-hour shifts in 2005. Presently, Brampton workers perform eight hours of labor, but they are paid for eight hours and 48 minutes.
Had they approved the deal, as recommended by CAW leaders, Brampton workers also would have ensured their plant would remain on a 3-shift production schedule past 2009.
The Feb. 19 vote, decided by a margin of 1,464 to 1,157, leaves Chrysler’s proposal “dead in the water,” warns Jerry Dias, national CAW representative at the Brampton plant.
This represents a setback for Chrysler, but a spokesman says it does not affect the product cadence set out in the recently unveiled “Recovery and Transformation Plan,” which promises 20 new and 13 refreshed vehicles through 2009.
However, Chrysler is mum about the prospect of reviving the proposal, and about plans for building the Imperial, which debuted last year as a concept car at the North American International Auto Show in Detroit.
“Is it unfortunate? You’d better believe it,” says Bob Chernecki, assistant to CAW President Buzz Hargrove. “Is it the wrong way to do it? Absolutely. We are disappointed in the decision. But hey, that’s democracy. And that’s what works in our union.”
Of Chrysler, Chernecki says: “We’re waiting for their reaction.”
The union is willing to continue discussing the matter, he adds, but no talks are scheduled.
A Chrysler spokesman offers no hints about the auto maker’s next move, saying only that the two sides meet regularly on various issues.
Meanwhile, analysts are perplexed by the notion of the Imperial joining Chrysler’s lineup.
“I don’t know of any automotive journalist who likes it,” says Joe Phillippi of AutoTrends Inc. “I think it’s a little over-the-top.”
Powered by a 5.7L Hemi V-8, the Imperial concept is about 17 ins. (43.2 cm) longer than its LX platform-mate, the Chrysler 300 sedan. Featuring a bold grille that recalls Rolls Royce, it also is about 6 ins. (15.2 cm) taller than the 300.
The 300 shares Chrysler’s LX platform with the Dodge Charger sedan and Dodge Magnum cross/utility vehicle – all of which are assembled at Brampton. However, according to Ward’s data, those vehicles migrate to the next-generation LY platform in model-year ’10.
In addition, the LY platform will support the ’09 Dodge Challenger, set for a 2008 production launch in Brampton. This suggests the Imperial also will be based on LY, says Stephanie Brinley, an analyst with AutoPacific Inc.
Like Phillippi, Brinley questions whether there is room in the Chrysler showroom for an upscale vehicle such as the Imperial.
“The 300 projects a nice price/value equation,” she says of the acclaimed sedan, which starts at $23,880.
However, that car tops out at $42,520 for a performance-oriented SRT version. Assuming the Imperial is positioned above the 300, “the premium for an Imperial seems a little big,” Brinley adds.
The Imperial would lend some cachet to the Chrysler brand, but in terms of a business case, Brinley also wonders about sales projections. “Volume is always where the question is,” she says. “What do they really expect?”
Chrysler is not saying, but Chernecki has an idea.
“Unless this product comes on board, we don’t have the third shift,” he tells Ward’s. “They’ve said that to us pretty clearly. Even with the products they’re building today, (plus) the Challenger, you can’t sustain a third shift.”
According to Ward’s data, Brampton built slightly more than 276,000 vehicles in 2006 – a 3.1% hike over 2005’s total of 267,883.
Related document: Ward’s</i> North America Production by Platform, December 2006