"Mopar" parts division and Chrysler Transport on the chopping block?

[TUFCAT]

Chrysler Discusses Shedding Noncore Assets With UAW
By GINA CHON and JEFFREY MCCRACKEN
August 28, 2007 12:41 p.m.

Chrysler LLC has proposed divesting certain noncore assets as part of its contract talks with the United Auto Workers union, people familiar with the matter said.

The auto maker, which was recently purchased by private-equity firm Cerberus Capital Management LP, is looking at shutting down or selling certain assets, such as its Mopar operations and Chrysler Transport, which employ a total of almost 1,300 workers.

The UAW is against the divestitures, saying it understands reductions made because of declining market share but opposes any moves to shrink the company outside of that reason, people familiar with the matter said.

The talks between the company and the UAW continue and it is unclear whether the divesting of assets will be part of the final agreement. The UAW and Chrysler declined to comment.

Mopar, which is located in Center Line, Mich., provides parts, after-market accessories and other components for Chrysler's three brands. Chrysler Transport oversees the hauling of supplies to and from Chrysler's plants and suppliers and has offices in Detroit, Toledo, Ohio, and Windsor, Ontario.

As opposed to the other domestic auto makers, Chrysler's priorities are based on shorter-term solutions that would immediately improve cash flow for the company. Chrysler's new chief executive, Robert Nardelli, said earlier this month that the company may look to "monetize some assets" as part of Chrysler's recovery plans.

Chrysler already has a restructuring plan that calls for 13,000 job cuts and a return to profitability by next year. The plan was put together by then-CEO and current Chrysler President Tom LaSorda, who is leading the company's talks with the UAW. The current contract expires on Sept. 14.

If the company does decide to shed some of its noncore assets, it would look at possibly placing employees in other locations or find other ways to ensure that the workers wouldn't lose their jobs, people familiar with the matter said.

Chrysler's talks with the UAW have also centered on the auto maker receiving a concession on health-care costs similar to the one General Motors Corp. and Ford Motor Co. received from the UAW in 2005. GM estimated its health-care deal, which forced UAW retirees to pick up more of their health-care tab than they had previously, would save it about $13 billion over a six-year period. Ford estimated its deal would save the auto maker about $850 million a year.

Chrysler is also seeking the ability to outsource to a third party some of its noncore employees, such as UAW members who handle maintenance or janitorial work. Ford has been able to do this kind of outsourcing under various local UAW agreements it has negotiated across the country. Those employees are still UAW members, but work for an outside firm and are paid about half as much in wages and benefits.

[Ghoste]

And so the splitting up into little saleable pieces begins.... ?? 

[Mike DC]

   
The vintage Mopar stuff is definitely gonna be viewed as "non-essential." 

I suspect it'll be slashed pretty early in the game.

 

[TruckDriver]

And so the splitting up into little saleable pieces begins.... ?? 

Pretty much I bet

[Highbanked Hauler]

 I can't argue with one thing and thats the cost of health care is killing most everybody

[71ChallengeHer]

Crap, I hope that don't get rid of my parts guy. Then I might have to pay full price for my parts.

[Todd Wilson]

   
The vintage Mopar stuff is definitely gonna be viewed as "non-essential." 

I suspect it'll be slashed pretty early in the game.

 

They can sell licensing to a company and that company can make the products. Chrysler makes money on licensing and maybe a % of profit per item sold and thats the end of it. No more 30$ an hour UAW employee's doing their gravy job selling Mopar accesories showing a loss at the end of the year due to UAW wages.


As much as I hate to see people lose their jobs........
The UAW needs to wake up and realize the Big 3 companies simply cannot be paying all this extra stuff all the time . A Union working sweeping the floor and cleaning toilets?WTF? They can get a cleaning firm to do stuff for much less in the long run. That makes sense to me. I recently heard on the radio an 80 year old retired GM employee crying about how he may loose his health insurance.  My question is WHY does an 80 year old person have health insurance. Why arent they on medicare like the rest of the retired people out there?!?! Bottom line is the car companys made the deal with the unions so they got to keep it. The 80 year old guy wont be around much longer. New employee's simply wont get the benefits the older workers got. They can still make 30$ an hour but they may have to cough up a few hundred to cover health insurance. As big as a company Chrysler,GM or Ford is they could get one heck of a good rate from an insurance company if they shopped around. They need to negotiate new contracts for new workers. The retired people will eventually die off. Maybe buy out some of the stuff from the retired worker. Heck give em 25grand cash and have them go on medicare.



Todd

[sixpack70]

They need to find a different way to do retirement plans and health care. Not sure what to do about health care but for retirement they should offer investment plans with a higher yield than the normal retirement plan.  That way when the employee leaves they have no financial liability to the person and the has a fat bank account from working 30 years and doing investments. I just got my social security benefit summary yesterday and I get a whopping 1000 dollars a month at age 65. If I could invest that money instead of pouring it into a government fund I could make between 6-10% interest over 30-40 years and have a huge amount of money in the end.   

The mopar parts demise would really hurt enthusiasts.

[Chatt69chgr]

What exactly is Mopar Parts Division?  Is that the parts counter at the Chrysler dealership?  Or is that just the Mopar Performance Parts?  I am guessing its just the Mopar performance stuff.  I wonder how much of that stuff Chrysler makes and how much is sourced from the outside?  One thing I bet they do is dump all parts in inventory that fit vehicles below a certain date.  There is still lots of stuff that fit our cars that you can buy--------if you can figure out the part number--------since they threw the old books away (on purpose) covering part numbers below 1984.  I may be wrong about this but I am thinking that a car company is only required to keep repair parts available for 11 years. 

[aussiemuscle]

Chrysler already has a restructuring plan that calls for 13,000 job cuts

and how are they going to get the job done with that many fewer workers? maybe they need to look at middle management 

[hemi-hampton]

Health Insurance is the Main Problem. Maybe we need the same Health Insurance the Canadians have?

[Ghoste]

Thankfully management and other non value added labor in the Big 3 never retire or get sick so they only have to go after the bad evil union guys.  If they can get them to stop expecting to not live in poverty after they retire the problem will be solved.

Yes, those costs are huge and yes, the North American flock to Asian carmakers has made the problem worse but there aren't too many of the line workers living in the same neighbourhoods as the people who are telling them what to do.

It's all been hammered to death here before though hasn't it.

[Big Lebowski]

"Non-essential personnel" Sounds like Dr. Daystrom's M-5 unit is in charge.

[Ponch ®]

Hah...how apropos....someone buys a "mopar" and tries to flip it!

Wonder if Cerberus will consign it to hplag?

"Perfect project for the bored CEO! Needs slight restructuring. Great Summer project!"

[chargerpeople]

OK a QUESTION

So, does this mean that all that "officially mopar liscensed " resto parts idea might go to the dumpster.. Why should the aftermarket guys pad chrysler pockets ??
just curious  . it seems a little silly for the new  chrylser to worry about this stuff !!

Any thoughts ??

Russ

[Charger-Bodie]

its awesome the way they use the chrysler corp heritage to promote the new crap , and the turn there backs on the people who own there heritage ............. but really who cares mopar outsources pretty much everything anyway so well just get it elsewere!!

[hemihead]

Outsourcing Chrysler transport I can see. If things ever turn around they can always go buy more trucks and transport again. The bitter pill to swallow is Mopar Parts. It won't be great if your new Chrysler or Dodge is in the service department waiting on parts after some $7.00 an hr. egghead orders a muffler instead of a radiator.
I think if they really want to cut costs they should start cutting the morons in middle and upper management who get the high salaries,expense accounts,stock dividends. They are the ones who shuffle papers all day and play on the internet.