The Republic Staff and Wire Reports

AUBURN HILLS, Mich. - For 13,000 Chrysler workers, Feb. 14 will be known as the Valentine's Day massacre.

Wednesday, Chrysler announced its long-awaited restructuring, which included a 16 percent reduction in its work force, shift reductions, a plant closing and a surprise hint that the plan could lead to a DaimlerChrysler divorce.

The Chrysler plan calls for closing the company's Newark, Del., assembly plant, and reducing shifts at plants in St. Louis and Warren, Mich., where the Dodge Ram and Dakota pickups are made.

How Chrysler's actions, particularly the reduction at the Warren plant, will affect Columbus-based Cummins Inc. has not been determined.

Cummins' Midrange Engine Plant near Walesboro exclusively supplies diesel engines for Chrysler's Dodge Ram.

In 2006, Cummins shipped about 160,000 of the engines for the pickup.

Cummins diesel models account for roughly 30 percent of all Chrysler group light truck sales.

"It's too early for us to comment," said Mark Land, Cummins director of corporate communications.

Karl Brauer, editor-in-chief of Edmunds.com, an online resource for automotive information, said Chrysler's suppliers will be hesitant to comment until everyone knows exactly how the cost-cutting measures will be executed.

"With the big announcement made in the media (Wednesday), I would expect decisions to come pretty quickly," Brauer said.

Among Chrysler's decisions will be picking who will supply emissions-compliant diesel engines for vehicles other than pickup trucks.

Cummins recently unveiled the new Dodge Ram Turbodiesel engine, the first engine to meet emissions standards for 2010.

In October, DaimlerChrysler and Cummins announced a partnership on the use of fuel-efficient, light-duty diesel engine to be produced at Columbus Engine Plant. The engine will be used in light trucks and sport utility vehicles.

Brauer said Cummins has an advantage on any potential upcoming diesel projects because of its strong relationship with Dodge, but Chrysler also is considering Mercedes Benz, which is part of DaimlerChrysler and supplies diesel engines for the company's European vehicles.

"They could conceivably work with both," Brauer said.

Declining sales blamed

Chrysler blamed the wrenching restructuring on poor sales after a shift in consumer taste from SUVs and trucks to more fuel-efficient vehicles. Workers blamed management.

"It's a shame that Chrysler didn't give us something better. That's not our fault," said Victor Harris, 56, who works in the paint shop at the Newark plant and has been employed there for 35 years.

Aside from the job cuts, Chrysler's German parent, DaimlerChrysler AG, said it is looking at all options to revive its fortunes, including partners for the troubled Chrysler. Its chairman wouldn't rule out a possible sale of the U.S. operation.

With Chrysler's job losses, the domestic auto industry has eliminated or proposed cutting 132,000 manufacturing jobs at 64 U.S. plants since May 2005, said Sean McAlinden, chief economist and vice president of research at the nonprofit Center for Automotive Research in Ann Arbor.

The devastation was partially offset by foreign brands expanding their manufacturing operations in the U.S. During that same period, foreign brands, such as Japan's Toyota Motor Corp., and their suppliers have created 30,000 to 40,000 factory jobs in the U.S. That should rise to 50,000 to 60,000 by 2009, McAlinden said.

Chrysler announced its plan at its Auburn Hills headquarters, saying it hoped the move would return its U.S. operations to profitability by next year. Like the other domestic automakers, DaimlerChrysler's earnings have been hit hard by rising labor costs and slumping sales as consumers have turned to foreign models. For years, the so-called Big Three pinned their fortunes on higher-priced sport utility vehicles and trucks, but that strategy soured when gas prices climbed to near $3 a gallon.

Under the Chrysler plan, 11,000 production workers, 9,000 in the U.S. and 2,000 in Canada, will lose their jobs over the next three years, and 2,000 salaried jobs also will be cut.

"Today's action by DaimlerChrysler is devastating news for thousands of workers, their families and their communities," United Auto Workers President Ron Gettelfinger and Vice President General Holiefield said in a joint statement. "While Chrysler Group's recent losses are not the fault of UAW members, they will suffer because of the reductions announced today."

Chrysler CEO Tom LaSorda said, "We believe that this represents a solid plan to return to profitability and lay the groundwork for a solid future."
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