The Canadian operations of DaimlerChrysler Corp. take a double hit with decisions to idle the Windsor, Ont., minivan plant over the holidays on top of reports that plans have been dropped to build the next-generation Dodge Ram full-size pickup at the expanded Pillette Road plant.
Ward's is told the Pillette decision had been made by former President James P. Holden before his sudden ouster.
Construction continues on what is expected to be a scaled down version of the new Pillette, Windsor, Ont. facility, originally pegged at $1 billion, including new body and paint shops.
Indications now are the plant will not make a new Dodge product until the '04 model year, as opposed to the original plan to assemble the redesigned '03 Ram pickup in the fall of 2002.
As a result, DCC is expected to extend van/wagon production until the end of 2002, essentially sentencing the Canadian workers to an additional nine months of rotating layoffs unless sales pick up. The two shifts have been rotating layoffs weekly.
Industry watchers speculate the new candidate for Pillette is the next-generation Dodge Durango sport/utility vehicle, due to bow as an '04. It is produced at the Newark, DE, plant, a geographically isolated facility that could be a candidate for closure. The time frame also gets DCC past the current United Auto Workers' contract at Newark that ensures workers cannot be laid off for more than 42 weeks and guarantees about 95% of take-home pay when off work. That contract expires in September 2003.
Additional Ram pickup production is possible by adding a third shift to existing Ram assembly plants, including St. Louis North.
Another scenario has Dakota moving to Pillette, leaving room for the larger next-generation Durango to be built in Warren, MI.
Meanwhile, the sudden closure of the Windsor minivan plant until Jan. 2 angered Canadian Auto Workers President Buzz Hargrove, who took it as a broken promise from DCC President Dieter Zetsche. Mr. Zetsche has apologized, saying he thought he told Mr. Hargrove during their Nov. 28 meeting that a holiday shutdown was possible.
The official reason for shutdown is to retool for a new product, in preparation for the '02 debut of a squashed minivan or tall wagon codenamed CS. That flies in the face of corporate boasting earlier this year that the new product could be launched without losing production. The company invested heavily in flexible manufacturing equipment to avoid the kind of downtime now underway.
Coincidentally, the shutdown is perfectly timed to address high minivan inventory. The company had 56-97 days' supply of minivans at the end of November. The industry standard is 60 days.
In other DCC news:
Reports are the carmaker will be reorganized into four divisions: luxury (Mercedes-Benz), compact and small cars (, and Smart), sport/utility vehicles, pickups and minivans (Dodge, Jeep, Mercedes, Mitsubishi) and commercial vehicles.
The Deutsche Bank AG is criticizing the $8 billion lawsuit by investor Kirk Kerkorian as damaging share price. Ironically, the lawsuit charges that misrepresentation of the takeover hurt share price.
DaimlerChrysler AG is expected to step up its cooperation withMotors Corp., amid talk the next-generation Neon small car could be built by Motor Co. Ltd.