Up to 2,035 job cuts are planned at Toledo Jeep Assembly Plant this summer, which is more than a third of the work force and about 400 more permanent hourly posts than union officials expected.
The remaining 3,600 permanent hourly and salaried workers will be far below the 4,900 positions promised by the company nearly four years ago.
A week before a planned celebration of the new Toledo-made Jeep Liberty and its $750 million factory, DaimlerChrysler AG yesterday notified Mayor Carty Finkbeiner of the loss of jobs from the approximately 5,650 permanent and temporary positions there now. The job cuts may result from ending production of the Jeep Cherokee, trimming output of the Jeep Wrangler, and restructuring the company's money-losing Chrysler unit, a company spokesman said.
The job-loss figure is what the company said it will include in its required notification to the city and state under the federal Worker Adjustment Retraining Notification Act. The law requires that companies give 60-day notice of such large layoffs.
But company spokesman Trevor Hale said the notification is a maximum figure, and the layoffs could be less. “This doesn't mean that there will be 2,035 layoffs. We're still determining the layoffs that will be in Toledo.”
Toledo Jeep's union officials had estimated that the Cherokee's demise would eliminate about 800 positions, while the Wrangler reduction would cut about 200 jobs by summer's end. About 650 temporary workers were expected to be furloughed after the plant ceased making three vehicles.
Mayor Finkbeiner declined to comment on the job losses, wanting more time to study the issues, said his spokeswoman, Mary Chris Skeldon.
Union members whose jobs are eliminated will collect at least 95 percent of after-tax pay until September, 2002, under the terms of their United Auto Workers contract with the company. While union leader Bruce Baumhower was upset by the news, he was hopeful that the pay guarantees will provide leverage to get more work at Toledo Jeep so those still on the payroll will be busy.
The union wants to add another Liberty shift or another vehicle as well as stamp body parts as workers do for the Cherokee so jobs are maintained as promised, said Mr. Baumhower, president of UAW Local 12, which represents hourly workers at the three-factory Toledo Jeep. In total, the plant has about 5,000 permanent hourly and salaried employees.
Why the Chrysler unit would idle Jeep workers instead of installing some production of its hot-selling PT Cruiser in Toledo didn't make sense to Mr. Baumhower. The automaker announced it decided to invest $300 million and increase Chrysler PT Cruiser production at its factory in Toluca, Mexico, instead of in Toledo or another plant.
“That's totally unacceptable; however, I do believe that the Liberty is going to take the market by storm,” thus requiring a third shift that will add 900 workers to the new Toledo North Assembly Plant, Mr. Baumhower said.
“It's up to them to bring some more work in there to get full employment,” he said.
The Chrysler unit expects to offer early retirements to offset Toledo Jeep's potential layoffs, which include some salaried employees, said Mr. Hale, the spokesman. Laid-off union members get 95 percent of their take-home pay under their contract, he said.
“If they're going to employ less than they originally thought, it's time they bring that stamping plant in here,” Mr. Baumhower said.
This year, the Chrysler unit announced that it will cease Cherokee production earlier than expected to make way for the Liberty, an all-new sport-utility vehicle that will be on dealership lots soon. The automaker said it will scale back Wrangler production by a fourth because sales began faltering, part of a restructuring plan that will trim 26,000 jobs overall in three years.