Thursday, February 15, 2007

Mr. Gutwrench: Big lay-offs at Chrysler

Is there ever good news out of Detroit? Other than the Tigers winning the American League Championship last season, I sure can't think of any. Even that win was bittersweet, given that they lost the World Series to St. Louis.

Yesterday's disheartening news was the announcement by DaimlerChrysler Chairman - and pitchman - Dieter Zesche ("Dr. Z" for those who've seen the ads) that Chrysler's cutting 13,000 jobs. That's 16% of its U.S. workforce. Overall, the article I read on this (from The Boston Globe) pegged the total "devastating cuts" in a "yearlong series" at 100,000 jobs for the domestic auto industry. Yet another World Series that Detroit can't win, I guess.

These lay-offs may be just what the doctor ordered, but they're also a big, fat reminder that the U.S. auto industry still hasn't figured it out yet.

The talking heads at Chrysler are, of course, putting their spin on this.

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

I'm too lazy to go back and look at past announcements, but I'm betting you could lay the last twenty years worth of spin statements from Ford, GM, and Chrysler one on top of each other and they'd match perfectly.

(And, by the way, Tom LaSorda? Last I saw of him he was doing ads for MLB trying to get sore-head fans of loser teams to watch last fall's play-offs - if only to root against someone. Boy, these DaimlerChrysler execs get around. And I wouldn't have pegged Tommy LaSorda for the the CEO type. Oh, wait a second. Tom Lasorda the baseball guy doesn't capitalize the "s". I thought for a moment that this was yet another one of those examples that tell us that baseball is life.)

Back to the Spin:

OK. So they spin. What would we expect them to say?

We've been making products that people don't want? We didn't automate soon enough and fast enough? The world is changing, jobs are changing - so what else is new? There's a big, wide world out there with a lot of other industrialized nation's in it and you can't expect us to dominate it, can  you?

Of course, the truth is all of the above.

And at least one industry analyst - BofA's Ron Tadross had some positives: "We see Chrysler as a decent business, at least relative to the other U.S. domestic manufacturers." Plus the market, naturally, rewarded the announcement, with a morning uptick of 4.2% in early morning trading.

Still, I find all stories depressing and gut-wrenching: 13,000 people. All those jobs. All those lives. All those futures.

Yes, as we all know - and as I've written about before - there are inevitable dislocations as we move further and further into the global economy. Share the wealth. Share the jobs. Sure, it may work fine at the macro level - and, for some, at the micro level. But for many production workers, getting laid off means a big cut in pay, a big shift in life-style, and a flat-out, worse-off existence.

This was no valentine for Chrysler workers, and my heart goes out to them.

(There was also news yesterday about an additional number of lay-offees being added to an already announced restructuring at Kodak. As if it's not bad enough that upstate New York has had about 100 feet of lake effect snow in the the last week, now 3000 more folks at Kodak are going to be out a job. Lake effect lay-offs, anyone.)

1 comment:

Mary Schmidt said...

Sigh. Why is cutting heads always a "first step to improved..." and rewarded by Wall Street?

This when Toyota is hiring in its U.S. plants....Hmmmm....