Chrysler is losing money by the truck-load, and its vehicles aren't selling, so common sense dictates that team Pentastar was going to start making cuts soon. That time is now, when Chrysler notified workers that it would be cutting 1,000 white collar workers. Chrysler spokesman David Elshoff told employees that the company would achieve its cut target through retirements, attrition, and buyouts, which means people won't be handed boxes and receive security escorts just yet. Chrysler management is making the cuts with the belief that the current economic situation here in the States isn't going to improve any time soon. A quick look at the Pentastar's car lineup shows the privately owned company would be in trouble even if the economy had a rosy outlook. No timetable was given for the white collar cutback.
Click above high-res gallery of the 2009 Ford Flex
Ford has been banking on strong sales of its crossover vehicles to help counter the sinking ship that is its line of SUVs. While the new Ford Edge and Lincoln MKX, along with the brand new Ford Flex and revised Escape, have sold well enough to post a meager 2.8-percent gain in overall sales so far this year, that number apparently isn't high enough to warrant a third shift at Ford's Oakville, Ontario plant that the automaker was hoping would be necessary. Unfortunately, this shift cancelation means that 350 workers who had planned on showing up for their first day next Monday are now left jobless.
While there are certainly buyers out there who require the capability to haul around their entire families and their associated gear, all large passenger vehicles -- crossovers like the new Flex included -- face an uphill battle now to overcome current market conditions, as this latest announcement once again proves.
Ford is hoping to continue the reduction of both the number of vehicles the automaker will produce and, correspondingly, its hourly blue-collar workforce. In order to make good with the UAW, the same buyout packages available last year are being extended to these unionized workers. The packages have not changed since they were offered to Ford employees in Kentucky in June of 2007. These latest buyout announcements involve workers from plants in either Michigan or Ohio, a further blow to the already weakened economies in these two auto-heavy states.
Earlier this year, Ford said it was hoping for another 9,000 hourly workers to take buyouts. Between 2006 and 2007, a total of 33,600 union workers accepted either buyout packages or early retirement packages, a huge percentage of Ford's total employees. At this rate, we wonder how many UAW workers Ford will have left after it's all said and done.
Gibbs Technologies, makers of vehicles like the Aquada seen above, has managed to snag tax breaks from both the state of Michigan and the city of Auburn Hills to open its world headquarters near Detroit, the U.S. capitol for automakers. While we're sure that Michigan's Oakland County is happy to see Gibbs' investment in the area and the additional jobs it'll bring along with it, one must wonder just how many $85,000 aquatic vehicles the company plans to sell to sustain itself. Though it's headquartering itself in the Detroit area, manufacturing may be done elsewhere. Michigan is still reportedly in the running, but we'd imagine a less seasonal climate may prove beneficial for the research, development and testing of its upcoming amphibious line of vehicles.
Their plate may be filled with churning out Tesla Roadsters and developing the Model S sedan, but Tesla Motors can't seem to get a break from the lawsuits. First there was the tiff with transmission supplier Magna, followed by potential development partner Fisker, and now Tesla is facing a class action (it's not a class action lawsuit until a judge deems it so) lawsuit from former Director of Public Relations, David Vespremi. Vespremi ended up on the cutting room floor during the tornado that swept through the company ranks at the end of 2007 was let go prior to the layoffs in January of this year. Vespremi is trying to connect his firing to the layoffs, but according to Tesla's Darryl Siry, that's not the case -- his termination was a separate matter. The details of the lawsuit allege that Tesla Motors did not practice good faith or fair dealing, violated labor codes with unpaid wages and waiting periods, and utilized unfair business practices. The document also listed libel and slander due to the harsh words spoken from the mouths of executives to the media when referencing the former employees.Thanks for the tip Jan!
UPDATE: Darryl Siry of Tesla wanted to clear a few things up with the story. To begin with, a judge must certify a lawsuit as class action before it can be deemed as such. That hasn't happened yet. Additionally, the part of the lawsuit filed by David Vespremi that asks for class action status has nothing to do with libel, slander, or defamation. The only part of Vespremi's lawsuit that could be classified as "class" has to do with Tesla's arbitration and non-conciliation clause in his employment agreement.
GM CEO Rick Wagoner announced sweeping organizational challenges designed to cut costs by $15 billion by the end of 2009. The Detroit automaker is looking reduce costs in an increasingly difficult market that could drop to 14 million units per year with fewer SUVs and trucks leaving dealer lots. Among the cost cutting measures, GM plans on reducing organizational costs by $10 billion, and another $5 billion by selling assets and working in the capital markets. Here are some of the highlights from the press conference:
Reduce salaried employee expenses by 20 percent through retirements, voluntary separations, buyouts, and other separation initiatives
Cut all salaried retiree health care after age 65, and use the over funded retirement fund to increase pension pay
No raises through 2009
Executive discretionary bonus elimination
Reduce sales and marketing expenses through reductions in events, motorsports, and ad spending
Cut truck production by 300k units by 2009
Reduce product development budget for 2009 to $7b by delaying launches of next generation trucks and SUVs and cutting V8 development
Increase spending on alternative powertrains
Push back blue collar retirement VEBA payment from 2008 to 2010, saving $1.7b
Eliminate stock dividend payouts effective immediately to save $800m
Raise $4 billion to $7 billion through asset sales and financing using some $20 billion in assets as collateral
Continue review of the Hummer brand
GM is under quite a bit of pressure right now, and with stocks sliding to $9.63 per share, the General didn't have the luxury of waiting until its August shareholder meeting to unveil its plans. Now it's up to Wall Street to determine whether $15b in savings is enough to turn things around.
UPDATE: Wagoner addressed GM employees and shed some light on what products are in the pipeline.
The Chevrolet Cruze will begin production in the U.S. in 2010
The Chevrolet Equinox will go into production in May of 2009, equipped with a direct-injected 2.3-liter four-cylinder engine.
The Cadillac CTS coupe has been green lit and is coming in the summer of '09.
Volvo hasn't been doing too hot lately, posting a $1.73 billion loss over the past five years as it flails to find its niche. Sales of almost every Volvo product have declined in 2007, with the S60 falling by 28.1 percent, the XC90 dropping 5.6 percent and the V70 station wagon losing 7.7 percent. For June of 2008, Volvo only moved 7,001 vehicles, down 14.2 percent compared to last year. Something has to be done on the retail side, and according to Automotive News, dealers are on their way out.
The automaker is looking to cut out approximately 30 percent of its U.S. dealer network by the close of next year, however, Volvo retailers won't be cut in Europe, nor Russia, where Volvo is a leader in premium vehicle sales.
Volvo recognizes that part of its problem is fuel efficiency, so it's focusing on producing smaller vehicles and pushing its C30 hatch hard in the States. A hybrid version of the XC60 is in the works, but that won't be out for at least another three years... in Germany, and as a stopgap, Volvo plans to implement start-stop technology on its smaller engines.
Toyota's got some changes and rearranges underway with its North American facilities to better serve the demands of the market. The biggest news is that Prius production will be coming Stateside, which will help unkink the supply pipeline, if not also lower costs. A new facility in Blue Springs, Mississippi is being readied for the battery-pack-mobile, though the location was initially meant to turn out Highlanders. With consumer desires shifting with the rise of fuel prices, cranking out more Priuses is a higher priority, and beginning in fall 2009, the Highlander will shuffle off to Princeton, Indiana. With the Highlander elbowing its way into the Princeton plant, the vehicle currently produced there, the Tundra, will see its production move under a single roof in San Antonio, Texas.
The big-truck moves are of little consequence when the plants are scheduled to be idled beginning August 8th due to lack of demand. Huntsville, Alabama will also hold up on cranking out V8 engines. While Toyota is putting some plants in neutral, it pledges to provide employment to affected team members during the shutdown. All of this shuffling is an attempt by Toyota to avoid sustaining humongous hits as the market for new cars takes a dump, as well as ensuring that the products it remains building match up with consumer desires. Always a good thing to make the things people want.
If Tesla has learned anything from the development of the Roadster over the past five years, it's that building a production car that meets present day regulations is a lot harder than anyone in Silicon Valley guessed. The process is filled with all kinds of potholes and having some people on the team with experience navigating those craters can be a big help. During AutoblogGreen's recent conversation with Tesla Chairman Elon Musk, he revealed that the company would have several experienced auto industry people coming aboard soon. The first of those new recruits has now been revealed as Mike Donoughe, Tesla's new Executive Vice President for vehicle development and manufacturing. Donoughe is a 24-year veteran of Chrysler who resigned from his VP post there three months ago, and was instrumental in the effort to redesign Chrysler's mid-sized cars. At Tesla he will be responsible for vehicle engineering for the Roadster and Model S except for the drivetrain. Initially, Donoughe will focus on getting the Model S' engineering and manufacturing sorted out. The Tesla press release is after the jump.
FOLLOW UP: Tony Cervone, a GM spokesperson, has told Bloomberg that HUMMER is the only brand the General is considering selling or closing.
The Wall Street Journal is reporting that General Motors is looking to cut thousands of white-collar jobs and sell, or stop production, of some if its brands. The General has supposedly set 2010 as a target for its return to profitability, but the automaker has never announced any details on how it plans to achieve that goal.
GM's management team will be meeting with the board early next month to discuss raising additional cash, and that could mean seriously pruning GM's bloated brand portfolio. HUMMER is supposedly already on the block, but Chevrolet and Cadillac – brands at the core of GM's business – are likely safe from the ax. However, Buick, Pontiac, Saab and Saturn, which haven't fared well during the biggest U.S. sales slump in 15 years, could possibly be sold or killed completely.
While it deserves note that all of this information comes from unnamed WSJ sources, GM's recent stock plunge and abysmal June sales numbers means something has to be done, and quick. If that entails cutting underperforming brands, so be it -- nostalgia be damned.
GM CEO Rick Wagoner announced sweeping organizational challenges designed to cut costs by $15 billion by the end of 2009. The Detroit automaker is looking reduce costs in an increasingly difficult market that could drop to 14 million units per year with fewer SUVs and trucks leaving dealer lots. Among the cost cutting measures, GM plans on reducing organizational costs by $10 billion, and another $5 billion by selling assets and working in the capital markets. Here are some of the highlights from the press conference:
London 2008: Honda OSM concept roadster says, "Cheerio!"
London 2008: Lotus unveils the Evora
2010 Chevy Camaro - Official Details and Images
2010 Chevy Camaro - LIVE from the reveal
Volkswagen unveiling two-door Elise fighter in LA, new sports car
First Drive: 2008 MINI Cooper S JCW
In the Autoblog Garage:2009 Nissan GT-R
North American Exclusive First Drive: Alfa MiTo
First Drive: 2009 Kia Borrego
In The Autoblog Garage: 2008 Mercedes SLK55 AMG
