Chrysler Group's German parent reported strong 2005 earnings yesterday -- in stark contrast to other Detroit automakers -- but the results may not be enough to ease worker fears that industry troubles will ultimately trickle down to them.
In today's auto world, no job is safe. Bonuses, salaries and benefits are on even shakier ground.
"Any given day, you can be turned around and turned out," Larry Boynton, 54, a worker at the Dodge City truck assembly plant in Warren, Mich., said in a recent interview. "The market is so soft and flexible now; you can't be certain what can happen tomorrow."
DaimlerChrysler AG said 2005 profit rose 15 percent, to $3.37 billion, from 2004. Operating profit at its U.S. Chrysler Group was $1.82 billion, up 7.5 percent.
So far, Chrysler has avoided restructurings like those at General Motors Corp. and Ford Motor Co. Chrysler also said factory workers will get bonus checks of $650.
The company's fourth-quarter results were even more dramatic. Profit rose 84 percent, to $1.14 billion, from the fourth quarter of 2004, lifted largely by $507 million in Chrysler Group profit.
Chrysler has been putting out new models and has better weathered the downturn in sales of large sport-utility vehicles that has battered GM and Ford. Chrysler's success is unusual for the automaker, the smallest of the Big Three. Many people thought Chrysler was doomed in 1980 when it needed a $1.5 billion government loan guarantee to survive.
Chrysler sold 2.5 million vehicles in the United States last year under the Dodge, Jeep and Chrysler brands. That represents 14.9 percent of the U.S. market, up from 14.4 percent in 2004. At the same time, Ford lost 1 percentage point of its market share, to 18.6 percent, and GM dropped 1.3 points, to 26.3 percent. A single point of U.S. market share is equivalent to the yearly output of an average car plant.
Chrysler's performance last year was bolstered by the Chrysler 300 C sedan, the Jeep Commander and minivans.
For workers, little reason to cheer
Despite the company's relative success, Chrysler workers see little reason to cheer. This year's bonus is half the size of last year's. A Chrysler spokesman said the bonus amounts were offset by the escalating costs of retiree health care and pensions. Rank-and-file workers aren't the only ones facing cuts. GM's board this month slashed executive pay, including the base salary of Rick Wagoner, GM's chairman and chief executive. His pay was cut in half, to $1.1 million. He hasn't received a bonus in two years.
Boynton and other workers said they are watching what is happening at GM and Ford. He said the colossal scope of GM's problems represent "the top of the house falling down" in the U.S. auto industry. "You know you're going to catch some dirt in the basement," he said.
Unionized workers at GM, Ford and Chrysler have the same basic contracts negotiated by the United Auto Workers union. Those contracts expire next year and auto executives and big investors are calling for deep concessions by the union. Whatever workers at GM and Ford give up, Chrysler workers may lose, too, despite Chrysler's improved profit.
Chrysler is negotiating with the UAW for health care concessions similar to those GM and Ford won last year from the union. Under that deal, current GM workers deferred some future pay increases. Retired workers, who had been paying nothing for health care coverage, will pay as much as $752 a year in deductibles, co-payments and premiums. GM said the deal will save the company $3 billion a year pretax, and as much as $15 billion in the long term. Ford won a similar deal from the union.
Aaron Devers, 45, has been working at Chrysler's Sterling Heights, Mich., assembly plant since 1994. Devers said Chrysler workers should not be asked for the same cuts. He said he expects Chrysler workers to reject such a deal when it comes to them for ratification. UAW workers at Ford narrowly approved the health care deal.
"If you're not struggling, why do you need it?" Devers said in an interview. The Sterling Heights plant where Devers works has had lots of downtime in past years. The car plant builds the mid-size Dodge Stratus and Chrysler Sebring -- cars that lost market traction long ago. But now, because of last year's gas-price shocks, production has bounced back and Devers has been working overtime.
Devers said workers have seen plans for the Dodge Avenger, a passenger car to be built at the plant. Chrysler is spending $250 million to upgrade plant machinery, installing more advanced robotic tooling to make the factory more flexible.
As the smallest of Detroit's Big Three, Chrysler's profitability had been most susceptible to major swings in the market. To insulate itself, Chrysler merged with Germany's Daimler-Benz in 1998. Under the direction of German executives, Chrysler cut its unionized workforce by 30 percent and closed or sold 17 factories in the past five years. Chrysler has 86,000 workers, compared with 123,000 at Ford and 141,000 at GM.
Devers said workers were initially leery of the German management. Workers felt they had been sold out by Chrysler's former American executives. Now, he said, the plant is more efficient. There's more advanced technology and a tighter focus on quality.
Still, experience makes Chrysler workers cautious about the future. Boynton has worked at Chrysler for 36 years. Today he is a shipping dispatcher. "It's a prestige job," he said. "There's only one guy on three shifts, and it's me."
He started on the assembly line at the Dodge Main plant in Hamtramck, Mich., a few months after graduating from high school. In 1969, Boynton said, jobs in the auto industry were plentiful. At the plant, the carmaker was building the Dodge Challenger, Barracuda and Dart.
Chrysler's dark days in the late 1970s and early 1980s "seem like yesterday to me," he said. Workers in the plant felt like a family that had been carved up when the Dodge Main plant closed in 1980, he said.
Many of the plant's workers went to Chrysler's Jefferson assembly plant in Detroit, he said. (A survivor, the plant produces the Jeep Grand Cherokee and Commander.)
Boynton stayed off work for months before being picked up by the Dodge City pickup-truck plant. Others with less seniority, he said, stayed off work as long as two years. Boynton said he hopes he isn't pushed into retirement.
"It's almost impossible to find a job that pays what I make today. You feel me," he said.
