DETROIT (Reuters) - Chrysler LLC's recent decision to cut up to 10,000 factory jobs and slash production in North America tested the credibility of the automaker's new private equity owner, the head of the Canadian Auto Workers said on Tuesday.
Canadian Auto Workers (CAW) President Buzz Hargrove also said the newly private Chrysler was risking failure under Cerberus Capital Management by giving up market share in a bid to make itself more profitable.
"There's absolutely no justification for what they've done. We've said to them that we think this is a stupid strategy," Hargrove told the Reuters Autos Summit in Detroit.
Chrysler announced earlier this month it would cut a third shift at its Brampton, Ontario plant as it phases out production of the Dodge Magnum wagon.
The automaker, which has said it needs to thin out its product line-up in order to restore profitability, is also shutting down production of the Chrysler Pacifica crossover in Canada.
Taken together, the two moves cost over 1,000 jobs for the Canadian auto union, which heads into contract negotiations with Chrysler, Ford Motor Co. (F.N: Quote, Profile, Research, Stock Buzz) and General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) next summer.
Chrysler also cut shifts at U.S. plants represented by the United Auto Workers union, which just ratified a new four-year labor pact with the struggling automaker.
Hargrove said he had been reassured by an initial meeting with Cerberus founder Stephen Feinberg shortly after the private equity firm bought Chrysler from former parent Daimler AG.(DAIGn.DE: Quote, Profile, Research, Stock Buzz)
"It seemed like he wanted to hold it forever. He said it was an American icon," Hargrove said of Feinberg. Continued...
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