Chrysler restarts minivan output after supplier strike ends
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DETROIT -- A strike by a parts supplier that shut down Chrysler Group's Windsor Assembly plant early this morning ended after workers revoted and overwhelmingly approved the contract -- allowing Chrysler to restart minivan production this afternoon.
A notice on the Web site of Canadian Auto Workers Local 444 said its 190 workers at Dakkota Integrated Systems had approved the new contract by 75 percent. It said the new contract was a three-year deal, but provided no other terms. Dakkota workers and those at Windsor Assembly on those plants' second shifts were told to report to work as normal.
The half-day strike shut down production at Windsor Assembly about 2 a.m., and caused Chrysler Group CEO Sergio Marchionne to issue a warning to the CAW about the automaker's upcoming talks.
"This is not the way to build a car company," Marchionne said this morning after the shutdown. "If this is the beginning of and a demonstration of the willingness of the part of our friends on the other side of the border to carry out… if that's the basis on which we're going to move forward, I think we're going to have a very difficult round of negotiations."
Dakkota assembles instrument panels for the Windsor Assembly Plant's Chrysler Town & Country and Dodge Grand Caravan minivans. A spokeswoman for Chrysler said the minivan plant resumed production with the afternoon shift today, and would continue to operate on its previous three shift schedule.
Chrysler's national pact with the CAW expires in September.
No-strike agreement
The automaker doesn't have a no-strike pact with the CAW. In the United States, the UAW accepted a no-strike clause through 2015 in the face of Chrysler's 2009 bankruptcy.
An extended shutdown of the Ontario factory would have further crimped supplies of the minivans, which are already below the industry norm.
The company has chalked up a 39 percent U.S. sales gain through March of this year after boosting sales 26 percent last year. Chrysler has also overtaken Ford Motor Co. and General Motors to rank No. 1 in Canadian sales.
Dakkota is a joint venture between Rush Group and Intier Automotive Interiors, a subsidiary of Magna International Inc.
Company response
In a statement today, Dakkota said it was pleased that workers had ratified the proposed agreement.
"We appreciate the way in which Local 444 leadership worked together with our negotiating team in an environment of trust and mutual respect while protecting the interests of their members," the statement said.
"Getting this difficult situation resolved was a collaborative effort, recognizing the implications that a long-term strike would have for all of us. We regret the effect that today's events had on our customer and everyone else affected and we look forward to getting back to work."
CAW Local 444 President Rick LaPorte said the three-year agreement includes a 50-cent hourly increase every year for the next three years, four extra paid holidays a year, a $500 signing bonus, increases to benefits, and improvements to working conditions.
After the contract was rejected, Chrysler pulled a three-year guaranteed work agreement that the plant had obtained.
"The minute the contract was rejected, Chrysler pulled that letter off the table, which is concerning to me," LaPorte said.
LaPorte said the union's vote to reject the contract "was a frustration of the short-shifting at this particular facility. We got a letter from [Dakkota] to work with the union to try and find the root cause of the short-shifting."
Other plants impacted
A report in the Windsor Star newspaper said the strike also had closed three feeder plants -- Oakley Sub-Assembly, TRW Ltd. and HBPO Canada -- idling about 300 workers, according to Dino Chiodo, first vice president at CAW Local 444.
Inventories for the Town & Country and Grand Caravan were below the automaker's 60-day ideal level. On April 1, Chrysler had estimated supplies of 53 days for the Town & Country and 39 days for the Grand Caravan, while the U.S. industry average for trucks was 66 days.
Through March, U.S. sales of the Town & Country rose 16 percent to 27,734 units, while sales of the Grand Caravan surged 23 percent to 34,462 units. The plant also produces small numbers of the Ram C/V cargo van, a commercial version of the minivan, as well as the Volkswagen Routan.
Windsor is Chrysler's most efficient assembly plant in North America, producing about 1,500 minivans per day across three shifts. The plant has about 4,600 hourly workers.
Marchionne was speaking at an event marking the company's decision to open an office in downtown Detroit.
You can reach Larry P. Vellequette at lvellequette@crain.com.
