Entire Briefing BookOverall Industry Environment
Repeated cycles of job losses, plant closures, benefit cuts – all signs show that keeping to the current course will only lead to greater hardship. The competitive pressures that resulted in last year’s $1.4 billion loss are not going away.Negative net pricing, rising health care costs, globalization, non-competitive and unsustainable labor contracts – these are realities as Chrysler enters the 2007 contract talks.
Chrysler cut 23,000 jobs over the six years from 2000 to 2006. Yet increases in already generous wages and benefits raised labor costs by $600 million over that period. Wages and benefits for union workers at Chrysler are an estimated $30 per hour higher than the Japanese transplants, a competitive disadvantage that is unsustainable.
Rising sales incentives, overcapacity and the proliferation of vehicle brands combine to force car and truck prices lower. Increasing costs can no longer be passed on to customers by raising sticker prices.
Smart manufacturing has improved efficiency and vehicle quality to levels that were considered unthinkable a few years ago. “Smart manufacturing” refers to a new workplace model that increases plant flexibility and boosts employee involvement in all facets of the design and processing of work stations. The result is a better work environment, while improving safety, quality, delivery, cost and morale.
Keeping to the current course is not an option. The labor model that has been followed for decades has led to a $1,000 disadvantage to the transplant automakers. Now is the time for a labor agreement that is a true breakthrough and will put Chrysler on the road to compete for the decades ahead.
For detailed information on Chrysler, please refer to the media briefing book (top left of this page). We’ve also prepared a short video featuring an interview with John Franciosi, Senior Vice President of Employee Relations. He explains the competitive pressures facing not only Chrysler but all of the domestic automakers. To view the video or listen to the podcast of the entire interview, please click the Video or Audio tabs on this page.
