Chrysler’s Labor Snafu Overshadows Dodge Dart Production Delay

DETROIT – Chrysler Chairman and CEO Sergio Marchionne sees no reason to fret over a parts glitch slowing the production launch of the Dodge Dart, but labor problems in Canada affecting another important product, the auto maker’s minivans, has him concerned.

Marchionne says a strike at Dakkota Integrated Systems, where Canadian Auto Workers union members voted down new local contract and walked out earlier today, could signal “a difficult round” of national negotiations is in store for later this year.

Talks for a new national contract between Chrysler and the CAW begin this summer. The labor contract expires on Sept. 14.

The strike by Dakkota, which ended earlier today after 12 hours, caused production losses at Windsor Assembly, home to the Chrysler Town & Country and Dodge Caravan. According to WardsAuto data, Windsor builds 480 units per shift, or 1,440 minivan daily on its 3-shift schedule.

Gord Gray, a spokesman for CAW Local 444, representing the striking workers, says the assembly plant lost part of its overnight production and the subsequent day shift before a special membership meeting ratified the new contract at midday.

Dakkota supplies instrument panels to Windsor on a just-in-time basis.

Dakkota’s local agreement expired last week, and CAW members voted a tentative agreement down because it did not contain the wage increases they sought.

Gray tells WardsAuto the Dakkota workers probably didn’t get a close enough look at the contract, which on top of extras such as more vacation days and a $500 signing bonus included an important pledge for work from Chrysler until 2017.

“It’s a nicely rounded agreement,” he says.

Other tentative local labor agreements expire later this week at TRW, Oakley Sub-Assembly and HBPO Canada. They also supply just-in-time parts to the Windsor plant.

At an event here today to announce Chrysler’s plans to move 70 corporate employees from its suburban headquarters into the city, Marchionne says he hopes the Dakkota strike is not an indication this summer’s talks with the CAW will be difficult.

Marchionne comments more glibly over the parts glitch delaying the production launch of the ’12 Dodge Dart, which will begin rolling out of the auto maker’s Belvidere, IL, assembly plant later this week. Builds were supposed to begin early last month.

“There’s not a thing on the Dodge Dart that I haven’t come across on any other platform,” Marchionne says. “Welcome to the auto industry.

“I wouldn’t be worried and I wouldn’t be concerned,” he adds.

All eyes are on the Dart C-car, the first full-fledged vehicle to emerge from Chrysler since its bankruptcy tie-up with Fiat. The Dart will lead a string of Fiat-based vehicles from the auto maker underpinning its recovery.

In unveiling the new office plans, Marchionne draws comparisons between Chrysler and the city of Detroit, calling them both underdogs on the road to recovery.

“This is going to be a great success story, but you need to get in now,” he says of the two entities. Marchionne will keep an office in the building.

The city is recovering from major population losses of the last few decades and the last national recession has it teetering on insolvency.

Chrysler’s move into the 23-story building will comprise 33,000 sq.-ft. (3,065 sq.-m) and bring its occupancy level near full, one important sign of a downtown revival. The historic building, whose grand architecture recalls better days in Detroit, will be renamed Chrysler House.

The auto maker will retain its headquarters and research and development nexus in Auburn Hills, which lies about 30 minutes north of the city. Marchionne declines to comment on where a Fiat-Chrysler headquarters might be located, a topic of great speculation in Turin and Detroit.

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