Chrysler prepares to rehire some employees

September 24, 2009

Chrysler prepares to rehire some employees

CEO’s 5-year plan includes paying OT


After 35,000 job cuts in the past two years and a bankruptcy that shifted control to Italy’s Fiat SpA, Chrysler Group is preparing to rehire an unspecified number of salaried workers and ask current workers to put in overtime to get new models to market by mid-2011, according to people familiar with the company’s plans.

Chrysler and Fiat Chief Executive Officer Sergio Marchionne is to present a five-year plan to the company’s board of directors Friday. If the board approves, he will submit the plan to President Barack Obama’s auto task force next week, said company insiders.

Marchionne wants face-lifts of at least five models by mid-2011. These include the Chrysler Town & Country and Dodge Caravan minivans and the Dodge Caliber, Jeep Compass and Jeep Patriot compact crossover utility vehicles. Chrysler also will revamp its iconic PT Cruiser.

"Marchionne knows they have to have something new as soon as possible, and 18 months is … reasonable," said Jim Hall, a veteran auto analyst in Birmingham.

Chrysler to punch the pedal on new models

Chrysler Group Chief Executive Officer Sergio Marchionne is emphasizing speed and freshening the company’s product lineup, with an early focus on minivans and enhancing its small crossover utility vehicles, said people familiar with the plan.

Specifically, Marchionne wants new looks for the Town & Country and Caravan, along with the Dodge Caliber, Jeep Compass and Jeep Patriot in about 18 months. These are projects that normally take between two and three years.

To execute the makeovers faster, Chrysler’s design, engineering and product development staffs are expected to work overtime in coming months, and management is preparing to rehire a modest number of people who were laid off or accepted buyouts last November and December.

Terms of the rehiring are being hammered out between the company and UAW Local 412, which represents many of Chrysler’s salaried designers. Neither company nor union would discuss the matter publicly, but sources familiar with the talks said one issue is whether some people who were laid off or accepted buyouts late last year could be rehired as contract workers.

No rehiring is expected until the board of directors signs off on the product plan. The board meets Friday in Auburn Hills. And President Barack Obama’s auto task force is expecting an updated business plan by Wednesday, according to company insiders.

Parts of the plan include new vehicles that are already more than halfway through the development process.

For example, next year Chrysler is expected to launch a redesigned Jeep Grand Cherokee unveiled last April at the New York International Auto Show, as well as a new 300C full-size sedan. Both were well under way before Fiat took 20% ownership of Chrysler.

The company has already decided to revive its iconic PT Cruiser.

Fiat intends to make its 500 minicar at Chrysler’s Toluca, Mexico, plant and introduce it in the United States by mid-2011.

Last week at the Frankfurt Motor Show, Marchionne said he was surprised at how little product work occurred at Chrysler over the last two years.

Since Fiat took a 20% ownership stake in Chrysler, Marchionne has spent considerable time not just in Chrysler’s Auburn Hills headquarters, but making unannounced visits to manufacturing plants.

"I feel a lot better right now," Marchionne said.

Chrysler workers and industry observers are most curious about Marchionne’s plan to make Chrysler competitive again in the midsize sedan market, a segment where Chrysler has struggled for years but represents a large percentage — more than one-fourth — of U.S. auto sales.

Insiders who have seen examples of the possible future midsize car designs said the replacement for the Chrysler Sebring and Dodge Avenger will have a Fiat underbody, but a clear Chrysler exterior look. It’s unclear how soon Chrysler can bring that model to market or where it will be assembled.


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