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Despite concerns within Jeep, Chrysler Group CEO Sergio Marchionne confirmed yesterday that the Wrangler will continue to be manufactured in Toledo, Ohio exclusively.
The question about moving production comes for a couple of reasons. First, because of remarks made in September by Jeep brand CEO Mike Manley that Chrysler was exploring production of Jeep vehicles in China. Second, because Wranglers are selling better than expected, and breaking monthly sales records.
“This plant has been at the heart of what we’ve done. I’ve said publicly that I would never build the Wrangler outside the U.S. and outside of Toledo. These are things that are unthinkable — to assemble a Wrangler somewhere else,” Marchionne said.
Marchionne’s comments came during a press conference where he talked about Chrysler’s recent $500 million investment into the same Toledo plant to build the next generation of Jeep Liberty.
Yesterday, union officials said that November produciton for the Wrangler surpassed the monthly sales record of 14,355 set in July. Sales for the Wrangler and Wrangler Unlimited collectively rose by 28 percent through October. It’s a sign that the brand is still expanding steadily, but that could be cause for concern.
Chrysler has yet to expand production capacity at the Toledo Supplier Park, which assembles the Wrangler and is part of the Toledo Assembly Complex. That means Jeep might not be able to keep up with demand for Wranglers, especially given that they are expanding into Europe.
“The horrible thing about Jeep is that it’s never had the chance to be exploited internationally. We’ve started a very active marketing effort in Europe now with Jeep, and we’ve had phenomenal results. Sales are doubling almost every 12 months,” Marchionne said.
“As we open up the distribution network to Jeep, it’s becoming probably the star of the European market, and I have similar expectations for Jeep, especially in the eastern part of Europe, and in China and Russia,” he said.
Gallery: 2011 Jeep Wrangler
[Source: Automotive News]
Local 551 of Chicago’s Ford Plant gave a resounding “no” to the new four-year labor contract. Local 551 represents about 6 percent of Ford’s United Auto Workers (UAW) employees and according to secretary-treasurer Scott Houldieson of Local 551, the two-tier pay scale was one of the biggest reasons the plant’s workers voted against it.
The current agreement would pay less experienced second-tier employees $19.28 per hour, 70 percent less than the first tier. According to Houldieson, that wasn’t enough to sway many second-tier voters. There was also no cost-of-living allowance and a provision for profit sharing and a signing bonus instead of wage increases for veteran employees.
The negative vote might seem like a sign of things to come, but there are still two weeks left for the agreement to be ratified. “The Chicago vote is a troubling, though hardly fatal sign,” said Harley Shaiken of the University of California-Berkeley in an interview with Reuters.
“In the 2007 Chrysler ratification vote, some early plants voted ‘no’ but the later plants voted strongly ‘yes’ when, in part, they understood their vote could prove decisive. We won’t know the result until the last vote is counted,” he said.
Tom Saybolt, a former Ford attorney who now teaches at the University of Detroit-Mercy law school agreed and pointed out that some Ford plants historically vote “no.” In fact, the current tentative agreement is more generous than what workers at GM are getting and significantly better than the deal Chrysler made.
Saybolt said that gives more leverage to the UAW to push the contract with Ford forward. If that isn’t enough to convince workers to vote “yes,” it could mean Ford losing patience and moving jobs to Mexico. If the agreement passes, 20,000 new jobs will be created, but if it fails there is a chance that 12,000 jobs will move south of the border.
The plant currently builds the Ford Explorer, Ford Taurus and Lincoln MKS.
Union employees working for Saab are growing impatient after the automaker said it could not pay wages to its workers because it had not yet obtained necessary short-term funding. The unions have threatened legal action that could end in bankruptcy for the automaker. The IF Metall and Unionen groups will send a formal demand for payment this Monday if their members have not received their unpaid wages. ”Then the company has seven days to react,” IF Metall representative Veli-Pekka Saikkala told Reuters. “After that there are two alternatives. Either we see that the situation can be solved, or we demand that Saab is put into bankruptcy.”
A rescue package for Saab has been set up by two Chinese car companies, Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co, which would solve longer-term financial issues, however this still needs to be approved by authorities in China and Europe.
Bankruptcy is still very possible for Saab and “The company is in a downward spiral. The longer it takes, the tougher it gets. The longer it takes, the more potential buyers will leave,” said analyst Martin Crum at Dutch Broker AEK
Saab stopped production in April because of payment disputes with suppliers and only briefly restarted production for a week at the beginning of June. So far Saab owes at least $47 million to Swedish suppliers, and the longer the Trollhatten plant is at a standstill, the deeper the hole becomes for the automaker.
[Source: Automotive News]
Contrary to earlier reports, Mazda will not be ending production of its Mazda6 midsize sedan. Earlier reports suggested that the slow-selling model would be axed after reports emerged that production of the vehicle at Mazda’s Flat Rock, Michigan plant may cease.
While Mazda confirmed that the Mazda6 would remain in the lineup for some time (and will get Mazda’s new SKYACTIV powertrains), it’s possible that production at the Michigan factory may move elsewhere, and this event was misconstrued as the end of the Mazda6′s life. Mazda may move production to Mexico to take advantage of less expensive, non-union labor, as the Flat Rock plant is shared with Ford, which pays its workers $8 per hour more than its non-union counterparts.
[Source: Car and Driver]
General Motors will invest $2 billion across 17 plants, as the company retools existing plants to build new products and hire more workers. GM confirmed that their Toledo, Ohio plant would receive $250 million in improvements and create 250 new jobs.
CEO Dan Akerson didn’t announced which plants would be infused with new capital, but the Detroit-Hamtramck assembly plant that builds the Buick Lucerne and Cadillac DTS will almost certainly be one of them. The plant also builds the Chevrolet Volt, making it to be a prime contender for GM’s attention.
GM announced prior investments in other plants, including the Corvette’s factory in Bowling Green, Kentucky, but the latest round of capital is considered separate from these announcements. Some have speculated that GM’s reluctance to announce their plans could also be a means to gain publicity and avoid affecting upcoming negotiations with the UAW.
[Source: The Detroit News]
General Motors is investing $131 million into their Bowling Green, Kentucky factory to help improve the legendary plant that produces the Chevrolet Corvette, but a new car won’t show up for another two model years.
Having made upgrades to the 2012 model, General Motors will focus on re-tooling the plant, while also adding 250 workers to supplement the 400 UAW employees already building America’s sports car. General Motors has remained tight-lipped on details regarding the 7th generation Corvette, but considering how good the current car is, we can’t wait to see what improvements arrive in 2014.
[Source: Kicking Tires]
UAW President Bob King said that the union may abandon their tactic of targeting one automaker during contract negotiations and negotiate with Chrysler, Ford and General Motors at the same time.
The UAW previously targeted one automaker during negotiations and used that to set an example for the others. However, King says that the relationship between the Big 3 and the UAW is better than previous years. King would like a deal to be completed before the union’s contract expires on September 14th.
King is hoping to extract concessions from the Big 3 after workers gave up thousands of dollars worth of compensation during the automakers lean periods. The resurgence of the Big 3 has spurred some union members to demand King take a more aggressive tone with the automakers. King previously criticized Ford for offering CEO Alan Mulally a $26.5 million compensation package, calling it “morally wrong”.
[Source: Detroit Free Press]
UAW chief Bob King slammed Ford CEO Alan Mulally’s $56.5 million stock package, claiming that “I don’t think any human being in the world deserves that much money.”
While certain to raise the ire of Ayn Rand fanatics everywhere, King is amping up the rhetoric ahead of the United Auto Workers “bargaining conference” where strategies will be outlined for the upcoming labor negotiations with Ford and other automakers. King’s rhetoric was particularly inflammatory and reflected the unions hard left leanings, with King quoted as saying “…It seems like one individual is getting all the gains instead of gains being shared by everybody.”
Ford’s stock was up 68 percent in 2009, with share prices quadrupling in 2008. Ford spokesman John Stoll told Bloomberg that Mulally’s compensation “…reflects Ford’s goal of retaining a world-class CEO.”
With Ford awarding more than $130 million in stock to its top executives, the UAW official in charge of Ford is optimistic that the company will also compensate union members who build the vehicles that Ford sells.
“I am going to look at that on the up side and say that I know that they compensated them very well at the top, so I feel that they are going to compensate us at the bottom very well,” said Jimmy Settles, in an interview with the Detroit News. The comments come as Settles, a UAW Vice-President, prepares to negotiate with the automaker, after it posted a $6.6 billion profit in 2010.
Ford handed out profit sharing checks to UAW members in February, worth an estimated $5,000 each on average. The UAW is holding a conference next month related to collective bargaining issues which settles described as a “barometer” to gauge union opinion.
[Source: Detroit News]
A Chrysler worker, claiming to have been fired after ending a relationship with the son of a United Auto Workers official, is now suing the UAW for sexual harassment, gender discrimination and retaliation. The lawsuit was filed in U.S. District Court in Detroit.
Janet Burney began dating Pat Byers, son of John Byers, who was head of the UAW-Chrysler National Training Center. Shortly after, Burney was promoted and given a substantial raise. Burney claims that after the relationship ended, her position was terminated.
“Pat Byers had told the plaintiff repeatedly that as long as she was with him her job in special assignment was secure,” Burney’s lawyer Richard A. Meier said in the lawsuit. “[Burney] was terminated because she is a female who refused to continue a sexual relationship with Pat Byers.
[Source: Detroit News]
Even though Toyota saw its dealerships and other facilities picketed by UAW members in 2010, Honda is taking a tough stance on any interference by the United Auto Workers, with John Mendel, Honda‘s executive vice-president, dismissing them in a speech made on Tuesday.
“The union announced that they’re going to target the operations of international automakers this year,” said Mendel, while speaking to the American International Automobile Dealers Association. “The issue of union representation is one for our associates to decide, not us. Having said that, we do not believe that an outside party will improve upon [our] outstanding track record of success … over the past 30-plus years.”
Mendel stressed that the prime directive for dealers was to “remain focused on your relationship with your customers and associates.
The United Auto Workers continued its campaign of irrelevancy as its President, Bob King, launched a series of veiled threats at foreign automakers with American plants (such as the Honda plant seen above), while simultaneously stating that the very survival of the UAW is at stake – and the organization of a foreign automaker’s plant is the key to the UAW’s continued existence.
“If we don’t organize these transnationals, I don’t think there’s a long term future for the UAW — I really don’t,” said King in a speech to members of a political conference held in Washington, D.C.
Despite the fact that foreign automakers offer equivalent or better wages than UAW plants, King is aggressively targeting them, with King planning to pick a target within 90 days. Other actions include targeting dealers of the chosen automaker for protests, and asking automakers to comply with “fair bargaining” principles, despite that fact that it runs counter to the complete absence of collective bargaining in foreign auto plants. “They don’t fear us and they think they can’t get away with it,” King said, in an almost naked display of insecurity regarding his own relevance.
King was at least cognizant enough to acknowledge that the UAW was a spent force, stating “Here’s the terrible position we’re in autos. Because we’ve fallen so far in the percent of workers represented by the UAW in autos” the union can’t demand big increases because of non union competitors. “So if we go in, we dramatically raise fixed costs for Ford, General Motors or Chrysler, we’re shooting ourselves in the foot. … We don’t want to disadvantage the (Detroit 3) companies.” King ended his speech by telling UAW members that Barack Obama’s re-election in 2012 would be beneficial for the UAW, due to his pro-union stance.
[Source: The Detroit News]
Stories of domestic auto workers showing up to work inebriated, and displaying reckless disregard for the integrity of their job are legion among a generation of consumers who swore off American cars in favor of imports. But that was the pre-internet era, where evidence was mostly anecdotal.
Now, The Truth About Cars, via Fox News, has a mountain of documented proof that UAW workers do, in fact, get drunk and stoned on the job. A Chrysler plant worker apparently tipped off a local Fox News affiliate that a bunch of workers were getting f!$&ed up on the job every single day for a period of ten days. On their lunch hour.
The video is pretty self-explanatory, and we want to make it clear that this is only a group of bad apples among a community of hard working Americans who are working hard to help turn Chrysler around. The problem is that the job security and culture of entitlement fostered by some elements allows for this situation to happen. With Chrysler owned by the taxpayers of America, and a slate of new products on the way that will ostensibly rescue the company, this is the last thing the beleaguered automaker needs.
[Source: The Truth About Cars]
A New York Times article reporting on Fiat’s push to “impose American-style standards” at an Alfa Romeo plant in Southern Italy, where workers workers will have to *gasp* work more hours and cut back on absences. One irate employee told the Times that“… too much work is going to kill our workers”, prompting nods of agreement from UAW management types across North America.
Among the hilariously stereotypical but odious offences listed involve “…peers who call in sick to earn money while working another job or skip work with a fake doctor’s note — especially when the local soccer team is playing.” The old jokes about Alfa factory workers building a car on Friday and finishing to the next week seem all too true, and Alfa still has a bad reputation for poor build quality to this day.
The Times article goes on to discuss the ongoing European economic crisis, and how the Alfa plant, situated in the South of the country, is emblematic of the significantly lower living standards in the region relative to the North of the country, and many other European nations.
Fiat CEO Sergio Marchonne wants to toughen up standards by cracking down on absenteeism and a culture where ” people don’t miss a chance to miss work.” One worker told an anecdote of how Fiat erected massive television screens inside the factory so that workers could watch the World Cup during work. Many employees still failed to show up, skipping work to watch the game elsewhere, despite being paid by Fiat to watch the matches. The same employee described the crushing effect that absent workers have, stating that “When one person is missing, it slows down the whole group and everyone has to pick up the slack. The production of 200 cars, for example, is slowed to 160 if a person is gone. Imagine when this is multiplied across the factory.”
Despite this, 63 percent of the work force agreed to accept the tough new standards, in return for an investment of almost $1 billion and the addition of a third shift at the plant. Measures like this are inevitable if Europe wants to pull itself back from the brink, and shrug off the crushing austerity programs, which force higher taxes and massive reductions in social welfare spending as a means of gaining some economic stability.
[Source: New York Times Photo Credit: Roberto Salmone for the International Herald Tribune]