Autoblog

Chrysler's restructuring plan and new plan for product development named Project Genesis is facing some expected criticism from many dealers. However, others are praising the cost-cutting, model-trimming and dealer-consolidation program that's happening as a result. As Chrysler pressures its traditional dealer network to sell all three brands (Chrysler, Jeep and Dodge) under one roof – without any financial assistance to help those already struggling with slow sales – many dealers are having a difficult time with the expense of investing in larger facilities to meet the Project Genesis requirements.

According to Chrysler, a one-brand dealer won't be able to survive with its limited vehicle offerings after Chrysler trims down its model lines (expected to be complete by 2012). This is forcing dealers to add the other brands, or shut their doors as sales slowly dwindle. Conversely, the closure of some dealers is having a positive effect on others. With padlocks now on the front doors of their competition, the surviving dealers are experiencing significant growth in vehicles sales, parts and service.

[Source: Automotive News, subs. req'd]

With 19 magazine covers and a starring role in Hollywood Nights, Popular Hotrodding's Project X is the classic hotrod. Since 1965 it's been modified constantly, but GM wanted to take a shot at the vehicle it had created 50 years ago. The General started with a 427 crate engine, and added parts from production models like the C6 Corvette and even the Chevy Colorado. Seats come from the Cadillac STS, a new center cluster was added, and the giant steering wheel from a 1963 Impala SS rounds out the interior. We were there for the live unveil of the updated four-wheeled legend, and you can view some of the action by clicking play on the video above.

Project X has now officially been renamed the Recovery and Transformation plan by the Chrysler Group, which plans to reduce its workforce by 13,000 people between now and 2009. About 11,000 employees will be hourly workers, while 2,000 will be salaried employees. In addition, total production capacity for the Chrysler Group will be reduced by 400,000 units per year, aided by the immediate elimination of shifts at its Newark Assembly Plant and Warren Truck Plant, along with cancelling a shift at its St. Louis South Assembly Plant in 2008. In 2009, the Newark Assembly Plant will be completely idled. There's also the standard restructuring moves you'd expect in the plan, like reducing the number of dealers, selling less to fleets, and offering retirement and attrition packages to current workers not affected by the layoffs.

Chrysler Group hopes the R&T plan will return the company to profitability as early as 2008. It's main weapon is cost reduction by the aforementioned layoffs and plant closings. The idea seems to be that if the company can reduce costs enough, its operating profit can offset the quarterly losses it will be facing in the near term.

It's not all slash and cut though, as Chrysler also announced a $3 billion investment in new engines, transmissions and axles that will focus on producing more fuel efficient power and drivetrains. One such product will be a dual-clutch transmission it's commissioned Getrag to produce and a new V6 engine dubbed "Phoenix". There's a slew of BLUETEC diesel vehicles on the horizon, and the 2008 Dodge Durango will host the company's first two-mode hybrid, as well.

One item of note in the press release issued is DaimlerChrysler CEO Dieter Zetsche's statement that, "we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler," which some analysts have taken to mean that selling off the Chrysler Group wholesale is still on the table as a viable option.

Check out the Chrysler Group's full press release after the jump for all the nitty gritty details, and let us know in the comments whether or not you think the Recovery and Transformation plan has what it takes to turn Chrysler around.

[Source: Chrysler Group]

As soon as we heard about DC's Project X, we knew the hits to Chrysler employees were forthcoming, but we didn't expect them to be so large and so fast. According to the Detroit News, next week Chrysler Group will announce their intentions to layoff 1,000 salaried workers, along with 10,000 hourly workers from underperforming US plants.

The salaried workers are not under union contract so their eminent dismissal will be unfettered, while reduced shifts at select factories will see the layoff of factory workers, who, unlike Ford and GM, will not be offered buyouts or early retirements. However, unionized hourly workers will receive a cash payout of $50k or more, including a voucher that will allow them to buy a Chrysler vehicle.

All this, according to the Detroit News' sources, will accompany plant closures, possibly in Newark, Delaware where pickup trucks are produced, as well as an engine plant in Detroit. Other production cuts may include shift reductions in St. Louis, Mo., the Jefferson North plant in Detroit and plants in Windsor and Brampton, Ontario.

The official announcement will supposedly take place next week, when DaimlerChrysler begins to seriously divulge the plans included in their Orwellian sounding Project X.

[Source: Detroit News]

We have more details on the rumored restructuring plan that the Chrysler Group is expected to announce on February 14th. First, it's dubbed internally as "Project X", which must mean it involves chimpanzees and large doses of radiation. In addition to radiated chimps (we're kidding, click the link for the punchline), Automotive News is reporting that the plan will likely involve cutting 10,000 factory jobs and closing the Newark Assembly Plant that builds the Dodge Durango and Chrysler Aspen, as well as the an engine plant in Detroit that we believe makes the 4.7L V8 motor for Jeep and Dodge. The ultimate goal is reportedly to make the Chrysler Group smaller, more efficient and more closely alligned with Daimler-Chrysler and Mercedes-Benz. The restructuring plan sounds similar to those currently being implemented by General Motors and Ford, though smaller in scale. For its part, Ford learned a valuable lesson not cutting deep enough the first time around, so we're eager to see if the Chrysler Group comes back for a second round of cuts, as well.

[Source: Automotive News]