Chrysler to restart seven plants

Thursday, June 18, 2009

DETROIT -- Chrysler Group LLC plans to restart seven assembly plants at the end of June after silencing all of its factories during its six-week stay in Chapter 11 bankruptcy protection.

The company confirmed Wednesday that factories in Sterling Heights and Warren, Mich.; St. Louis; Toledo, Ohio; Brampton and Windsor, Ontario; and Toluca, Mexico, would restart operations June 29. A plant in Detroit that makes the Dodge Viper sports car restarted Monday.

In addition, parts stamping, engine and transmission factories that feed those plants also will restart June 29, Chrysler said in a statement.

The company had shut down all of its manufacturing operations May 4, shortly after filing for bankruptcy protection April 30. But inventories of vehicles made by the eight plants have started to shrink, said spokeswoman Dianna Gutierrez.

The eight assembly plants that are restarting employ about 15,000 workers, according to Chrysler's website.

Restart of the rest of the company's factories will be announced later, the statement said, probably after the normal two-week summer break in which all factories will be closed the weeks of July 13 and 20.

When the factories come back on line, their work will be done under a different manufacturing system, one used in Europe by Fiat Group SpA called "World Class Manufacturing."

Union officials say training in the new manufacturing methods got underway in early June, with workers learning a more detail-oriented, data-driven process that is similar to but less bureaucratic than Chrysler's system.

Chrysler emerged from Chapter 11 on June 10, the same day most of its assets were transferred to a new company run by Fiat, which now controls the Auburn Hills, Mich.-based automaker.

The day of Chrysler's bankruptcy filing, some of its factories were forced to send workers home due to lack of parts, because parts makers stopped shipping for fear that they wouldn't be paid. But Gutierrez said those problems have been solved, and suppliers are supporting the company's efforts even during tough times.

Chrysler's sales are down 46 percent for the first five months of this year compared with the same period last year, and the company forced 789 dealerships out of its network while it was in bankruptcy protection.

But Gutierrez said sales have depleted stocks of models made by the factories that are reopening. Chrysler reported improved sales to individuals in May as it tried to cut low-profit sales to rental car companies and other fleet buyers.

Sterling Heights makes the Dodge Avenger and Chrysler Sebring midsize cars, while Warren Assembly and St. Louis North manufacture the Dodge Ram pickup truck.

Toledo Supplier Park makes the Jeep Wrangler, while Brampton, Ontario makes the Chrysler 300, Dodge Charger and Challenger. Chrysler and Dodge minivans are built in Windsor, and Toluca makes the Dodge Journey crossover and Chrysler PT Cruiser.

Chrysler had a 28-day supply of the Challenger muscle car at the end of May, and a 38-day supply of the Wrangler, according to Ward's AutoInfoBank. The Ram pickup, Chrysler's most popular vehicle, still was plentiful with a 115-day supply, and the company had a 158-day supply of the PT Cruiser, an aging retro-style car that looks like a panel truck.

Industry analysts say a 60-day supply is optimal to provide enough of a selection, but not so much that large incentives will be needed to move vehicles.

The five Chrysler assembly plants that will stay dark include the Jefferson North plant in Detroit that makes the Jeep Grand Cherokee and Commander sport utility vehicles, and the Belvidere, Ill., factory that makes Chrysler's smallest offerings, the Dodge Caliber and Jeep Compass and Patriot.

Chrysler has 90 days' worth of Commanders and 130 days of Grand Cherokees, and it had more than a 140-day supply of Patriots and Calibers.

Respond to this story

Posting a comment requires free registration: