Chrysler Workers Rally for New Products

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Chrysler Workers Rally for New Products as Board Weighs Plans

Sept. 25 Chrysler Group LLC union workers rallied today outside the sedan assembly plant in Sterling Heights, Michigan, in a plea to add new models to keep the factory running instead of closing as planned next year.

Less than 20 miles away at Chrysler’s headquarters in Auburn Hills, Michigan, the automaker’s nine-member board was expected to approve a plan for future vehicles, said company officials, who declined to be identified because the matter is private.

The factory that makes Chrysler Sebring and Dodge Avenger sedans is the only one of 11 North American assembly plants that Chief Executive Officer Sergio Marchionne and the board plan to close. They must decide how to replace those midsize cars with a new model that uses designs and engineering from part-owner Fiat SpA, while seeking to quickly improve the current lineup.

“We want to reverse their decision and keep the plant,” said Bill Parker, president of United Auto Workers union Local 1700. “That means investing in the plant and getting new products.”

Parker was among about 300 people attending the rally at the factory, which employs 1,322 workers. UAW members and their supporters held up a 100-foot-long banner featuring a collage of employees’ photos and the slogan, “Faces Not Numbers.”

Chrysler is considering keeping the plant open for as long as two more years, people familiar with the situation have said. The factory is owned by Old Carco LLC, the remains of the former Chrysler LLC that went into bankruptcy April 30 and later sold the bulk of its assets to the new Chrysler Group.

Possible Lease

Chrysler Group, controlled by Turin, Italy-based Fiat, would have to lease the plant from Old Carco if it continues to operate the plant past 2010.

The combined 40,452 Sebring and Avenger sales in the U.S. through August are less than a third of Ford Motor Co.’s Fusion sedan, according to Autodata Corp. of Woodcliff Lake, New Jersey. The market leader, Toyota Motor Corp.’s Camry, sold 238,612 in the same period.

The board’s agenda includes discussion about how to develop the company’s four brands, Chrysler, Jeep, Dodge and Mopar parts, as well as what types of vehicles would be built and where, people familiar with the matter have said. After the board approves the business plan, it is scheduled to be presented to President Barack Obama’s automotive task force next week, an administration official said.

Shawn Morgan, a Chrysler spokeswoman, declined to comment on the company’s product plan or board meeting.

Fiat Technology

The plan will show how Fiat technology will be incorporated into Chrysler vehicles. Fiat took a 20 percent stake in the new company in exchange for sharing vehicle designs, engines and transmissions, something the U.S. company valued at as much as $10 billion.

Fiat can get an additional 15 percent ownership of Chrysler by reaching performance milestones, such as building a fuel- efficient engine in the U.S. The Treasury owns 9.85 percent of Chrysler, Canada has 2.46 percent and 67.69 percent belongs to the UAW retiree medical fund, according to bankruptcy court documents.

Fiat’s three board members are Marchionne, Alfredo Altavilla, chief of Fiat’s powertrain unit and Stephen Wolf, the chairman of R.R. Donnelley & Sons Co. The U.S. Treasury has four appointees, including Chairman Robert Kidder, who also is chairman of 3Stone Advisors LLC. Canada has one appointee, George Gosbee, CEO of Tristone Capital Inc., and the UAW trust is represented by former Michigan Governor James Blanchard.

Marchionne, who is also CEO of Fiat, is seeking to rehire some workers to help speed development of new models and improvements to existing vehicles in the next 18 months, the Detroit Free Press reported yesterday.

‘No Final Plans’

“We are reviewing our resources but have made no final plans,” said Morgan, the spokeswoman.

Chrysler will unveil its product plan in November at an event in the U.S., the company said at the Frankfurt Motor Show last week.

Chrysler has about 24 months of cash to fund operations if Marchionne can’t turn the company around, a person familiar with the company’s finances has said. Chrysler has to sell more than 1 million cars and trucks in the U.S. to break even, people familiar with the matters have said.

Marchionne said in Frankfurt he expected U.S. auto sales to total about 11 million cars and trucks in 2010. That would indicate approximately a break-even year for Chrysler, which sold 9.2 percent of the new cars and light trucks delivered in the U.S. through August.

Marchionne said he was surprised that so little work was done on new vehicles in the two years before Fiat took over management on June 10. Fiat will send engineers and managers as needed to fill holes at Chrysler, he said Sept. 16.

Paolo Ferrero, the chief of Fiat Powertrain Technologies’ product engineering unit, was named Chrysler’s vice president of powertrain on Sept. 22.

Article Link:Chrysler Workers Rally for New Products as Board Weighs Plans - Bloomberg.com