Chrysler to Canada: No help? No more production
In what seems to be a repeat of a warning issued in December, Chrysler LLC co-President Tom LaSorda said Wednesday night that unless it received government loans and concessions from the Canadian union, the automaker would end its Canadian production and reopen the idled Fenton minivan plant.
LaSorda told a House of Commons committee that Chrysler needed three factors: $2.3 billion (U.S. dollars) in loans from Canada, an agreement by the Canadian Auto Workers to cut labor costs and the resolution of a tax dispute with the Canada Revenue Agency, according to media reports.
“Chrysler LLC cannot afford to manufacture products in a jurisdiction that is uncompetitive” with other automotive jurisdictions, said LaSorda, quoted in several reports.
Chrysler employs about 9,400 workers in Canada, according to reports. It makes the Dodge Grand Caravan and Chrysler Town & Country at a Windsor plant, and then the Dodge Charger, Dodge Challenger and Chrysler 300 cars in a Brampton, Ontario facility. It has been seeking Canadian loans since last year.
Toronto newspaper The Globe and Mail specifically mentions LaSorda’s response when asked whether Chrysler can move production: Yes, the Fenton minivan plant — which made the same minivans as the Windsor plant until it was idled in October — could reopen to take production, and plants in the U.S. or Mexico could make the models produced in Brampton.
But this plea is reminiscent of a warning issued in December. The Globe and Mail reported then, quoting anonymous sources, that Chrysler warned it could close the two Canadian assembly plants if it didn’t get emergency funding. A Chrysler spokeswoman declined to comment to the Post-Dispatch at the time, but analysts and local union officials said they wouldn’t get their hopes up about that possibility. Some called it a political move and unlikely to happen.
Even now, production movement likely would cost money, at a time when Chrysler is relying on government help to survive. According to plant fact sheets on Chrysler’s media site, the Brampton plant is the only assembly plant to make the Charger, Challenger and 300 models.
LaSorda told the Canadian government Wednesday that Chrysler would invest in Brampton and Windsor if it gets the help it needs, The Globe and Mail reported. He called the Windsor minivan plant “highly profitable.”
Like their U.S. counterparts, the Canadian plants are not immune to pressures on the global auto industry. Chrysler said last week that it would cut one of the Windsor plant’s three production shifts and indefinitely lay off about 1,200 Canadian workers. The cut would happen no sooner than June 24, according to the automaker.
I wouldn’t give a dime of bail out money to any US based Auto maker that has production in a foriegn country. Make them move production back within the borders. That being said, the union contracts need to be redone.
You have this huge complex in Fenton just wasting away.
The number of jobs that a factory like the Fenton Chrysler facility generates when running at capacity outside it’s four walls runs into the thousands.
The main point about this is that it could cost Chrysler some serious money to retool, retrain, and redraw their supply lines by transferring this work to Fenton. Not to mention that they’d probably be closing down a profitable plant! I’d love to see it happen for my area neighbors, but the chance of it is pretty darn slim. It’s mostly smoke and saber-rattling…
The reason Fenton was closed was because it was one of the worst plants in the corporation. Everyone that I know that went down there said it was a joke. The Windsor plant is more productive, profitable and the workers there actually give a s**t. Bringing production down to that hole will just accelerate Chrysler’s demise.
All the robots and automation that comprised the Fenton South Plant have been removed and SOLD. It is basically an empty building short the overhead power and free conveyors which would require some reconfiguration then Chrysler would have to tear apart all the automated robotic welding and assembly systems that are currently in Windsor and ship them to Fenton and reinstall them, then debug them. And if you do not think that some strange stuff would happen to those assets? Robots, robot control cabinets, PLC control cabinets and all other transfer components could make it out of Windsor unscaved you are living in a dream world.
This said it might be feasible to build a minivan in Fenton for the 2011 model year if they started tearing out the equipment from Windsor now. And yes, St Louis South is a crap hole, a empty abandoned in place building.
Plus Brampton builds the Charger, 300 and Challenger which are some of their top selling cars. Where are they going to relocate that automated tooling to? Back in 1996 I oversaw the installation of the Body Shop there, then in 2003 we took all the robots out, spray painted new numbers on them and put new weld guns on them, reprogrammed them and built the new models after the end of the Intrepids run.
Those assets are on their last leg, have been depreciated once, then a 2nd time when they were spray painted and assigned different asset numbers so Chrysler probably committed fraud by depreciating these assets twice? Who knows. Point is, that plant will need to be totally retooled as the robots that have been in operation there are vintage 1996 and are 13 years old. Most of them at 8633’s some of the most robust robots ever built but they cannot last forever. So, if Chrysler survives? Brampton is fast approaching another TOTAL retool. Canada has them by the sack.
“The War at DOE- Part 1:
There is a war underway at DOE. For decades, DOE has been controlled by the Oil and Coal lobbies and insiders, enter the Obama administration. Programs and process which had previously been staged to make sure that alternative energy only achieves a 7% penetration, and no more, are in upheaval. The most powerful men in Washington have been entrenched in DOE but internal investigations and clear sky policies have shaken their empire to the very foundation.
The world economy has been based around the trading of oil and coal since the Vikings first transacted exchanges for these products. Some of the deadliest wars, diseases and intolerance has been caused by the policies around who has access to these materials. These materials affect trillions of dollars of economic movement and certain people and companies will do anything to maintain control of that money and that power. These power brokers have maintained that control for over a hundred years until now! Something happened; a perfect storm of political, economic, science and social whimsies, that nobody could have predicted would occur at the same point in history, shockingly reached a nexus. Now, at a single point of opportunity, the entire tide is about to change, but not without a battle royale that has already begun to spill onto the streets.
Steven Chu and lawyers from all of the energy and environmental committees in the major media, House, Senate and law enforcement groups have descended en masse in concurrent reviews of the connections of all of the players. Charts and graphics are starting to appear that show faces, boxes and lines drawn from individuals back to corporate interests much like the Elliot Ness mob charts that law enforcement used to present as they were about to bust up a Capone enclave. The Loan Guarantee Program, Section 136 funding and other efforts have clearly been halted in their tracks by oil and coal interests, in a highly visible set of delays as the battles move close to the public eye. Steven Chu, who’s past work has been funded by the US Government was all too familiar with the process but even his “revolutionary physicist” agenda could not have prepared him for what he found when he arrived at 1000 Independence Avenue in DC.
The White House, Chu, House and Senate activists and a select team of outside consultants are busy reviewing every individual at DOE, their role, their connections and the power structure that exists. Multiple public secondary hearings have already been called by Senate committees and closed door meetings are underway constantly in one of the highest pressure, most intense, most revolutionary efforts to rebuild an agency ever attempted in the Capitol. The other side is not blind to this effort and, while their power has been diminished, they are hard at work to thwart the fix. Every tool of political pressure, manipulation and social massage is being brought to bear. The effort has gone public as the first barrage of prime time TV commercials from the oil and coal industry, in relatively incredible volumes, at incredible cost have started to roll across the television airwaves, nationally, pleading for a new “appreciation of oil and coal” and admonishing Americans that it “isn’t so bad, really…”
More money is on the table, not only ready to be spent but already late and delayed, causing alternative energy companies to go out of business simply because they were promised the money , they ramped up to receive it and now they have higher than normal overheads, no money, and an even worse survival rate. So the plan of the opposing oil and coal industries is working, they are putting the alternative energy companies out of business simply by tactical logistics, but, if that money does come unstuck soon; the largest funding for alternative energy in world history will take place and then things could change. Hungry early-stage companies move light-years faster than old stodgy oil companies so it is possible, for the little new companies, even with less money and time, to supersede the old oil and coal giants. Will they, it is all up to Chu and his Watchmen… stay tuned…”
©2009 Washington Newscene. Reproduction authorized
I just love to hear comments from the completely uninformed, but the Chrysler South Plant had been much more efficient than the Windsor Plant and most of the information about Windsor for years was propaganda. They have high absenteeism, and they have many issues inside the plant that aren’t made public to the mainstream media. Although highly unlikely, a new launch is much faster than it used to be and the government picks up a lot of the tab for training on launching a new vehicle. It’s not like they need a bunch of vehicles right now anyway. Chrysler will need workers and they will be able to hire them at a top rate of $14.00hr per the last agreement.
The robots have not been sold, all they have to do is reprogram them and set up the welding heads. you do not know what you are talking about. They do not need to move hardly anything from windsor to restart this plant. We were building vans there just a few months ago and it would be simple to start it back up. It was a good plant and it was the most productive minivan plant in north america.
2006: Tom LaSorda received $3 million in compensation, including a $1.1 million annual bonus while Chrysler claims they lost money and launched significant attacks on workers’ jobs, wages, working conditions and benefits.
2007: Chrysler CEO Tom LaSorda made $5.39 million in salary, benefits, bonus payments and stock awards, according to a filing by former parent DaimlerChrysler AG DCXGn.DE. While Chrysler once again claims they have no money.
2007:LaSorda received a $15.7-million bonus from Daimler for helping with the successful sale of Chrysler to Cerberus, according to Daimler AG filings with the U.S. Securities and Exchange Commission. His total 2007 compensation from the German company was about $20.7 million under the exchange rate in February.
The average Chrysler lineworker makes approx $30/hr (not $70 as LaSorda falsely claims), good money for a brutal job.
At $5.39 Million per year, Tom LaSorda makes approx. $2695 per hour. And he thinks Canadian workers are overpayed and taxpayers should pay for his mis-management and bonuses.
This is extortion.
He should be arrested.
The 2 Chrysler plants in Canada are amongst their most cost and quality effective. Chrysler vehicles also sell better in Canada relative to America. This blatant attempt to extort the Canadian government will back-fire. The Canadian media will be all over this. Sales will suffer, their government may well fire back with a threat to seize assets if Chrysler abandons a country they’ve been producing (and selling) in since before WWII. The Chrysler fool who tried to play hard-ball from a position of weakness should be fired.
Ford hasn’t asked any tax-payer, on either side of the border, for a nickel, much less tried to extort it. They have only suggested governments help with consumer incentives (like Obama promised in the campaign).