Fiat Chrysler Automobiles is eliminating one of three shifts at its Windsor, Ont., minivan plant, eliminating about 1,500 jobs in September, the automaker said Thursday afternoon.
“In order to better align production with global demand at its Windsor Assembly Plant, FCA notified Unifor today that it intends to return the plant to a traditional two-shift operation, beginning Sept. 30, 2019,” FCA Canada spokeswoman Lou Ann Gosselin said in a statement. “Retirement packages will be offered to eligible employees. The company will make every effort to place indefinitely laid off hourly employees in open full-time positions as they become available based on seniority.”
The automaker has already idled the plant, which began building minivans in 1983, for three weeks this year and plans to do the same for two weeks in April, citing softening sales in the segment.
Minivan demand in the United States, the plant’s biggest market, has dropped steadily since peaking at 1.371 million in 2000. U.S. sales of minivans dropped 0.3 per cent to just under 500,000 units last year, and demand has dropped 23 per cent through the first two months of this year.
Unifor National President Jerry Dias said he heard from FCA on Thursday afternoon.
“We are surprised for sure. We didn’t see it coming. I just got this bomb dropped on me like everyone else,” he said. “Ultimately we need to see what the plan is, what they’re doing with other products.”
Dias said he plans to meet with FCA executives, perhaps as early as Friday.
“We’ll be on the phone tomorrow. I should have more details in the next few days,” he said. “I’ve heard of different things in the pipeline, but instead of me speculating, I want to meet with people and see what the plan is.”
‘Keep the pressure on’
An emotional Unifor Local 444 President Dave Cassidy said at a news conference Thursday evening that if FCA decides to add product to its lineup “you’re going to build it in Windsor.”
“We’re going to keep the pressure on the company,” Cassidy said. “Give us whatever they want, we will build it.”
The plant first added a third shift in 1993. Cassidy the elimination of the shift is classified as “permanent.”
“But this is not a General Motors Oshawa situation,” Cassidy said.About 6,000 employees currently build the Chrysler Pacifica, Chrysler Pacifica Hybrid and Dodge Grand Caravan at the facility. The plant has long operated on three shifts daily, usually six days per week. Running at full volume, the plant produces nearly 1,500 minivans per day.
Earlier this month, FCA Canada confirmed that the plant was already running shorter shifts.
Pacifica sales in the United States in 2018 were unchanged at 118,322, off just 48 units from the year before. In Canada, Pacifica sales were down three per cent to 5,999 in 2018.
U.S. sales of the Pacifica are down 24 per cent to 14,817 units through February while Grand Caravan sales are down 27 per cent to 19,634 units.
Pacifica sales in Canada are down 54 per cent to 512 units through the first two months of 2019. Grand Caravan sales are down 20 per cent to 4,836 units.
The Pacifica had 88 days of supply in the United States as of March 1, 2019, according to the Automotive News Data Center in Detroit. The Grand Caravan had 20 days of supply. Similar data isn’t made public in Canada.
‘Writing was on the wall’
Dennis DesRosiers, of the Toronto-based DesRosiers Automotive Consultants, isn’t surprised by the move.
“I think the writing was on the wall,” he said. “The overall market has been down 14 of the last 15 months, and there’s no sign of that turning around this year. And this particular segment, the minivan, is the only light-truck segment that is down this year and losing market share.”
DesRosiers called the Pacifica a vehicle that’s caught between the premium luxury SUVs and basic minivans, such as the Grand Caravan.
“People looking for a basic minivan would gravitate to Grand Caravan while people looking for premium ultra gravitate to premium SUVs,” DesRosiers said.
He said the plant is “one of the best, if not the best, FCA plants in North America” and expects it to survive.
“Traditionally, it was efficient to run a factory on two shifts,” he said, adding he was unsure about what product — if any — will be added to the production mix there.
Awd pacifica, and voyager
Although FCA has not disclosed future product plans, Cassidy has previously said the plant would be retooled this summer for an all-wheel-drive Pacifica minivan.
As well, Joe McCabe, president and CEO of U.S.-based AutoForecast Solutions, told Automotive New Canada that FCA planned to replace the Dodge Grand Caravan with another entry-level minivan, bearing the Voyager nameplate. That vehicle would be assembled on the Pacifica platform, McCabe said.
Ontario to ‘fight tooth and nail’
In a statement following FCA’s announcement, Ontario Premier Doug Ford said he planned to “fight tooth and nail to protect the jobs of the autoworkers in Windsor.”
Ford said he plans to speak with FCA Canada President Reid Bigland as well as Unifor President Jerry Dias “to urge them to work with us to protect these jobs.”
“My message to Fiat Chrysler is this: Do not make this decision based on the anti-business policies of the former government over the past 15 years,” said Ford. “Our government is lowering taxes, lowering electricity rates, and slashing red tape.
“There has never been a better time for auto-manufacturers to invest in the province of Ontario.
“We remain steadfast in our support for Ontario’s auto manufacturing sector, but more importantly we remain steadfast in our support for the autoworkers both in Windsor and province-wide.”
Cassidy said in a statement later in the day that “we will need the support of all levels of government as we move forward.”
Canada’s Minister of Innovation, Science and Economic Development Navdeep Bains will head to Windsor to address the situation.
“I will be travelling to Windsor [Friday] to offer our government’s unwavering support for these workers and their families, and our commitment to fight for their jobs. We are strongly committed to doing everything we can to fight for these workers and their jobs,” Bains said in a statement. “Despite this bad news resulting from a decline in global demand, Canada’s auto sector remains strong. With our advanced tech ecosystem, unrivalled market access and highly integrated North American supply chain, our highly skilled autoworkers are uniquely positioned to design and build the cars of today and tomorrow.”
The federal government has come under fire by Windsor-area union and political leaders for failing to include the Chrysler Pacifica plug-in hybrid in its EV incentive program, which was part of the 2019 budget.