Shift dilemma threatens Liberty

Hot sales, economic uncertainty place Chrysler, UAW at odds

The Chrysler group is selling the Jeep Liberty as fast it can produce them. But the automaker does not want to add a third shift at its Toledo North assembly plant, even though the UAW local has threatened a strike that could halt production in January.

It is a dilemma. Sales of many models are hot due to the excitement created by 0 percent financing, but the outlook for next year and beyond remains uncertain. Because the economic climate is so unpredictable, Chrysler prefers to put the plant's existing employees on heavy overtime - working up to 60 hours a week - rather than hire as many as 700new employees.

The Chrysler group's recovery plan is in jeopardy because 0 percent financing likely is pulling some sales from 2002 into the fourth quarter this year. The company's recovery plan was based on a stable U.S. market in 2002 with sales of at least 16 million units and there is no guarantee that will happen.

A strike would shut Toledo North and Chrysler's older assembly plant in Toledo, which produces the Jeep Wrangler. That plant is operating on one shift.

In November, the two plants' 4000 workers who make up UAW Local 12 voted to strike within 60 days, meaning mid-January, if the Toledo North plant fails to add a third shift. But a strike would have to approved by UAW executives in Detroit. And that had not happened by late Friday, Nov. 30.

A key issue for the union is that about 800 workers have been laid off since Liberty went into production, and adding a third shift at Toledo North would restore most of those jobs.

Bruce Baumhower, president of UAW Local 12,said workers at the Liberty plant work an average of 60 hours weekly, with overtime. "There is a high enough demand for Liberty that they (the Chrysler group) could put the laid-off folks on the third shift," Baumhower said.

A Chrysler spokesman said the group is anxious to increase the output of Liberty but wants to wait until spring to assess the market.

The Chrysler group is falling short of revenue targets for 2001, and at the end of September had slashed 16,000of the 18,000jobs slated to be eliminated in 2001 as part of its restructuring program. By 2003, the group wants to trim a total of 26,000 positions. Chrysler wants to avoid adding a third shift only to be faced with laying off more workers if U.S. vehicle sales take a nosedive next year.The UAW local said it is at odds with Chrysler management over a number of health, safety and production issues. But the major dispute is restoring some of the 800 jobs >that were eliminated when Liberty went into production replacing the Jeep Cherokee.

Citing health and safety problems is one of the few reasons the UAW can authorize a strike under the terms of its contract, said Sean McAlinden, director of the economics and business group at the Center for Automotive Research in Ann Arbor, Mich.

"A third shift would add a minimum of 600 to 700 jobs, but Chrysler is facing a down market, a recession and the effects of the Sept. 11 terrorist attacks. Chrysler is telling the union, 'How can you demand a third shift.' "

"The sides are in a stand-off. Local 12 is one of the most militant unions in the UAW," McAlinden said. "They will walk, and they will stay out and no more cute Liberties."

Baumhower said another issue is the outsourcing of the Liberty cockpit to supplier Johnson Controls Inc. A group of suppliers led by Johnson Controls assemble the plastic dashboard, mount the instruments and deliver plug-in systems - all work previously done by UAW workers at the old Cherokee plant.

Baumhower said giving the work to a supplier betrayed the union and cost 140 jobs. "Our guys felt there was a commitment if they were very productive that they wouldn't work themselves out of job and still do some kind of work at the plant."

You can reach Diana T. Kurylko at dkurylko@autonews.com

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