DaimlerChrysler

Charles Brown CharlesB at SPAMCNCL.ci.detroit.mi.us
Tue Feb 27 14:31:54 MST 2001


DaimlerChrysler workers fear for future
Some accuse firm of betraying them

By Shawn D. Lewis / The Detroit News



Charles V. Tines / The Detroit News

DaimlerChrysler workers listen to Chief Executive Dieter Zetsche's live news
conference in Stuttgart, where he talked about the automaker's bleak profit outlook.


    DETROIT -- The mood was somber as DaimlerChrysler AG workers filed into the
automaker's Mound Road Engine Plant for the Monday afternoon shift.
   They were bitter about the struggling automaker's latest round of profit-sharing
payouts -- $375 for 2000, down from a record $8,100 last year.
   Some workers expressed feelings of betrayal after the automaker -- formed in 1998
with the merger of Chrysler Corp. and Daimler-Benz AG -- unleashed a bleak profit
outlook Monday.
   "I want to know what happened to the billions of dollars they had before Daimler
took over," said John Wyant, 57, of Sterling Heights. He's a millwright with 37 years
of service with the company.


"I want to know what happened to the billions of dollars they had before Daimler took
over. They didn't tell us the truth in the first place. They never laid all their
cards on the table."
-- John Wyant, 37
Sterling Heights


"We've had our ups and downs here, but I know they'll recover. It's just a matter of
time. Believe it, the investors don't want to lose anything."
-- Willie Davis, 53
Detroit




   "They didn't tell us the truth in the first place. They never laid all their cards
on the table. Instead of a merger, this is really nothing more than a takeover."
   As part of the Chrysler Group's restructuring, the Mound Road plant is scheduled to
close in 2002 when Chrysler shifts engine output to more modern facilities on Mack in
Detroit.
   "I'm not very happy with this whole thing," said Ed Cox of Warren, a machine
operator who already has 30 years with Chrysler.
   "I believe they squandered that money and now they're making the hourly people pay
for their mistakes. We heard that they're not offering a package deal to this plant,
and we've got a lot of people inside this plant who are very discouraged."
   Inez Smith, a machinist from Pontiac, was drawn to the automaker largely because of
hefty bonus checks doled out to Chrysler workers in recent years.
   But as a new employee, with less than a year of service, she's disappointed that
she's too late to benefit from the big bonuses.
   "This is my first year, so whatever Chrysler gives me is a bonus," she said. "I was
really looking forward to that $18,000 and long-term employment. I am concerned about
what's going to happen, especially since I haven't got much time in, and they're going
to be laying folks off. I do want to be employed."
   Willie Davis, 53, of Detroit isn't worried about being laid off. He's already put
in 36 years and has witnessed the ebb and flow of Chrysler's earnings over the years.
   "We've had our ups and downs here, but I know they'll recover," he said. "It's just
a matter of time. Believe it, the investors don't want to lose anything."
   But Charles West, 50, a pipefitter from Brownstown Township, isn't quite as
optimistic.
   "I've always saved my money because we've seen hard times before, but this is
terrible. I feel betrayed. I knew right from the get go that when they started talking
about a merger, it wasn't going to be a merger of equals," said the father of six.
   "I'm not real happy because we won't have as much profit sharing and this is really
going to affect our families."

(((((((((

 Grim year still ahead; projections questioned

February 27, 2001




BY JEFFREY McCRACKEN
and JAMIE BUTTERS
DETROIT FREE PRESS BUSINESS WRITERS



STUTTGART, Germany -- Workers and Wall Street met the Chrysler Group's reorganization
plan Monday with a solid dose of skepticism that the U.S. arm of DaimlerChrysler AG
can return to profitability anytime soon.


The 3-year financial projections -- which even at their best indicate a Chrysler far
less profitable than the one in place a year ago -- offered little comfort to U.S.
workers waiting to see whether they'll be part of the massive layoffs expected in
coming months.


By mid-March the company will likely announce it is laying off more than 3,000
white-collar workers as fewer than expected take advantage of the automaker's
early-retirement offer.


Salaried workers also are on edge by a delay in merit raises while their blue-collar
colleagues are mulling their relatively paltry $375 average profit-sharing check, also
announced Monday by the automaker. Just a year ago, Chrysler's workers were the envy
of the industry with record average profit-sharing checks of $8,100.


"I'm not really happy with it," said Steve Freeman, an assembly line worker at the
Mound Road Engine plant in Detroit. "But I figure anything right now is better than
nothing. Really, I don't think anybody is happy here."


Dissatisfaction was tempered by the knowledge that nearly 26,000 workers will be
without jobs in the near future. The company plans to close six plants and eliminate
shifts at four others.


Wall Street analysts, who make investment and lending recommendations, expressed
skepticism that the automaker will achieve the goals it set for itself.


Standard & Poors, an influential Wall Street credit-rating agency, lowered its rating
on DaimlerChrysler AG for the second time in three months, effectively making it more
expensive for the company to borrow money. Its credit-worthiness, which was lowered
from A-plus to A in December, was further lowered to A-minus Monday.


Analysts said they were surprised at the extent of the automaker's projected losses
for this year and divided on how realistic the financial projections for next year and
2003 are.


Chrysler Group officials say the restructuring plan -- which includes sharing basic
vehicle structures between Chrysler and Mitsubishi, and the previously announced job
cuts and plant closings -- is expected to save the company $16.9 billion during the
next three years.


The Chrysler Group said it lost $1.29 billion in the final three months of 2000 and
more than $1.8 billion for the last half of the year. For all of 2000 it made $470
million, compared with $5.2 billion in 1999.


Beset by slow U.S. vehicle sales, high incentives and overproduction, the maker of
Chrysler, Dodge, Plymouth and Jeep vehicles is projected to lose another $2 billion to
$2.5 billion this year, said Chief Executive Officer Dieter Zetsche.


The best-case scenario has the automaker making a small profit in 2002 with profits
growing to more than $2 billion in 2003.


"I thought the leadership laid out a pretty cogent analysis of the steps they need to
take," said David Healy, auto analyst for Burnham Securities in New York. "I think
it's a realistic plan. I mean all they're talking about is $2 billion in profits in
2003, which isn't much compared to what they made two years ago. I think they kept the
projections conservative so Schrempp would look better and keep his job." Juergen
Schrempp is the chairman of DaimlerChrysler.


1,400 white-collar workers take deal

White-collar workers in Auburn Hills were worried about keeping their jobs as well.

Of the approximately 4,000 eligible for early retirement, only 50 percent had
responded to the offer as of Monday. Of those 2,000, 70 percent or about 1,400
accepted a deal, said Megan Giles, a DaimlerChrysler spokeswoman.

But eligible workers have until the end of Wednesday to respond or change their minds
which could change the figure substantially.

"This is really a moving target," Giles said, noting that final figures aren't
expected until Friday at the earliest.

At that point, the company will be able to evaluate how many additional layoffs will
be necessary to meet the 6,800 white-collar staff reduction number, which includes
1,800 contract workers.

"The waiting can be tough," said one DaimlerChrysler employee in the
information-technology department who requested anonymity.

"I'm a little concerned. We get a lot of reassurances, but I'm preparing for it," he
said, adding he's had resumes out for weeks.

"I think a lot of people feel like they were sold out by the merger."

At least 50 DaimlerChrysler workers were approached at restaurants near the Auburn
Hills headquarters Monday to comment on the state of the company and not one person
was willing to talk.

Many said they are just not comfortable discussing the current situation at the
automaker.

Giles said instead of getting merit raises in April, which is usually the case among
white-collar workers, they will have to wait until July. Giles said this is a small
cost-cutting effort since no retroactive pay will be paid. No savings estimates were
available.

But Giles insisted workers will get raises. "They are going to get merits," she said.

Workers and Chrysler Group executives say evaluations from the last three years will
be used to decide who stays and who goes among white-collar workers.

While workers were talking about a mid-March date to learn their fates, Chrysler Group
officials said the word won't come down until the end of March.

"The bulk of the layoff announcements will be made by the end of March," Giles said.

Workers with the company for more than a year will receive severance packages and
health care benefits, she said.








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