Chrysler Could Halt Production Due To Canadian Labor Dispute
March 20, 2009
Chrysler could be forced to stop production at a number of Canadian plants next week because of a continuing labor dispute. At a Canadian plant of a supplier Aradco Management ULC (99% of its business is with Chrysler), the automaker is trying to remove its tooling to pair up with a different supplier, but about 80 workers aren't about to let that happen and have barricaded themselves inside the plant. If the standoff isn't resolved by the end of this week, production at several North American factories will be put on hold, a Chrysler spokesman said.
According to The Windsor Star, Chrysler tried to ease the situation by offering the roughly 80 workers $205,000 -- or about $2560 per person), but the employees want severance pay as the removal of the tooling essentially means the company will be forced to cease operations. In fact, an estimate by a lawyer representing Catalina Precision Products (Aradco's parent company) pegs Chrysler's dues at around $2 million to the supplier.
This is not a good sign for Chrysler, which said it might stop making vehicles in Canada altogether should current labor concessions and tax disputes not sufficiently help the automaker's finances. Additionally, Chrysler wants a $2.3 billion loan from the Canadian government. Chrysler was Canada's number-one selling automaker in February, but we wonder what effect this standoff will have on March sales.
Source: Automotive News (Subscription required), Chrysler