Tuesday, August 12, 2008

Chrysler Asks UAW For Four 10-Hour Workdays

By Chris Haak


Last week, news came out that Chrysler had asked the UAW for permission to switch its Toledo, Ohio Jeep assembly plant from five 8-hour days to four 10-hour days in a move to save energy costs (both for the company in terms of energy consumption with the plant being open with the lights on for one fewer day per week, and for the workers, who can save on commuting costs by reducing the number of days they work by 20%). The plants are also able to completely shut down their paint ovens for during the long weekend, significantly curtailing natural gas usage because they aren't completely shut down during a normal workweek.

Yesterday, the news came out that Chrysler had asked the UAW to not only change the Toledo facility to a four-day schedule, but in fact to change the schedule of nearly all of its plants (save the ones already working at or near capacity, such as the Belvidere, Illinois and Sterling Heights, Michigan facilities).

Although cost savings under the plan are actually fairly minimal in the scheme of things (Chrysler EVP of Manufacturing Frank Ewasyshyn wasn't sure of the full savings, but estimated it to be around $10 million annually), but if the plants aren't humming at capacity and the company intends to be creative and flexible with its cost saving ideas, the schedule change is probably a better alternative than forcing a 25% price reduction down the throats of its suppliers, for example.

According to the Detroit Free Press, Chrysler is also looking at some other possible efficiency improvements to reduce its costs, particularly in terms of energy usage, because building a shipping a vehicle is such an energy-intensive endeavor. One idea the company is investigating is to pair up with companies that happen to be moving an empty truck in the same direction that they need to send a shipment (after the truck has made its initial delivery). Instead of these other companies and Chrysler paying the costs of moving empty trucks back to their point of origin to pick up another load, if Chrysler can successfully implement its idea, the trucks would be full in both directions, but with Chrysler's cargo in only one of those.

Chrysler already can boast of operating the highest efficency plants in North America, as well as the smallest workforce (albeit with the smallest sales volume) of the Detroit 3. Further improving their factory efficiency might keep the company afloat until help arrives from Nissan, Chery, and others in terms of badly-needed small cars that have suddenly become a must-have in the US market.

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