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Thread: Here is How the Private sector deals with financial problems

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    Unregistered Cgoodsp466's Avatar
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    Here is How the Private sector deals with financial problems

    In the private sector things get cut back and people lose jobs.In the public sector we just raise taxes an hire more people.School districts and Towns take notice on what the big boys do.














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    STATEMENT ON CHRYSLER OPTIONS


    Today the Supervisory Board will reach a decision on the Board of Management's decision to restructure the Chrysler Group. The Board of Management intends to consider other, more far-reaching strategic options with partners in order to support and facilitate the program. No option is being excluded in the interest of arriving at the best possible solution for the Chrysler Group and DaimlerChrysler as a whole. -- DaimlerChrysler


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    Chrysler to Cut 13,000 Jobs
    In Push to Regain Profitability
    Parent Company Posts Quarterly Profit,
    While U.S. Unit Reports $162 Million Loss
    By JOHN D. STOLL and TERRY KOSDROSKY
    February 14, 2007 10:28 a.m.

    AUBURN HILLS, Mich. -- Chrysler Group on Wednesday said it will cut 13,000 jobs, close a major assembly plant and reduce shifts at three other plants as part of a restructuring effort designed to restore profitability at the auto maker by 2008.

    Its German parent, DaimlerChrysler AG, also said it is looking into further strategic options with partners and that it doesn't exclude any option as it seeks the best solutions for its U.S. unit.

    MORE ON CHRYSLER


    • Page One: In Humbling Overhaul, Chrysler Faces Big Cuts
    02/14/07

    • Chrysler's Road Is Paved With Distractions
    2/6/07

    • DaimlerChrysler to Pull U.S. Arm Closer
    2/6/07

    • Page One: Chrysler Turnaround Falters
    9/20/06

    • Page One: Ford and Chrysler Darken Their Outlooks
    9/16/06

    Shares of DaimlerChrysler traded on the New York Stock Exchange were up 4.3%, or $2.79, at $67.01 in early trading. The stock hit its highest level since mid-2002 earlier in Frankfurt trading after DaimlerChrysler -- which has been under pressure from some shareholders to sell the loss-plagued Chrysler unit -- said its board would consider all options.

    Chrysler, fresh off a $1.5 billion loss in 2006, as expected announced that it will close its sport-utility-vehicle assembly plant in Newark, Del., as part of an effort to trim 11,000 blue-collar jobs over the next three years and reduce its annual production capacity by 400,000 vehicles. At the same time, the auto maker will shed 2,000 white-collar jobs by 2008, bringing Chrysler's work force reduction under the restructuring to about 16% of the total.

    The announcement follows a severe downturn in North America in 2006 that left the company with bloated inventories and a need to increase sales incentives while cutting production of trucks and SUVs, which had been a mainstay of profits for Chrysler. The situation, which mirrors struggles at Ford Motor Co. and General Motors Corp., demonstrated Chrysler's need to downsize its business in its core market.

    "The key to our long-term success will be our ability to transform the organization into a different company to achieve and sustain long-term profitability," Chrysler Chief Executive Tom LaSorda said in a statement.

    Chrysler Weighs Down Results

    DaimlerChrysler said earlier Wednesday that its fourth-quarter net profit fell 40% from a year ago, dragged down by the weak performance at the Chrysler unit. Chrysler swung to an operating loss in the latest quarter of €124 million ($161.6 million), from a profit of €428 million a year earlier. For the full year, however, DaimlerChrysler's operating profit came in at €5.52 billion ($7.17 billion), slightly above the guidance previously provided by the auto maker, thanks to the solid performance at the Mercedes Car Group.

    Not long ago, Chrysler appeared to distance itself from the troubles plaguing U.S. rivals GM and Ford. Its market share increased in 2005 and it turned a profit that year. But Chrysler fell victim to a sharp decline in sales of pickup trucks and SUVs in 2006 amid consumer concerns about fuel prices and a slowdown in the housing market. Pickups, SUVs and minivans made up about 70% of Chrysler's lineup.

    The auto maker didn't cut production fast enough and unsold cars piled up. Chrysler also built vehicles without dealer orders, and it has taken several months to whittle down that bank.

    The restructuring plan is deeper in some areas than expected, said Argus Research auto analyst Kevin Tynan. He added, however, that it's merely more of the same from U.S. auto makers. Mr. Tynan said that until U.S. auto makers address their high cost structure, it will be hard to compete with companies such as Toyota Motor Corp. that have been steadily gaining market share in the U.S.

    "At the headline, it's probably more aggressive than what was expected, but there's a lot of inputs that have to break your way," he said. "And when you don't have the cost structure to make it happen, I don't know if it's enough."

    He said winning the race in a hyper-competitive market like the U.S. comes down to having the lowest cost structure, and the U.S. auto makers don't have it.

    Primary Focus on Costs

    DaimlerChrysler is trying to end the boom and bust profit cycle typical of Chrysler even before the 1998 merger that created the German-U.S. company. So far, Chrysler has failed to deliver a consistent stream of profits. The restructuring announced Wednesday is the second major effort to overhaul the Chrysler business this decade.

    Chrysler said Wednesday that its primary focus in the reorganization is costs. The company aims to cut as much as $1.5 billion in material costs by 2009. Chrysler said that the plan is structured so that the company can deal with unforeseen headwinds. The auto maker expects that it will result in $4.5 billion in financial improvements, or a return on sales of 2.5% by 2009.

    CHRYSLER'S COST CUTS


    Capacity & Efficiency
    Reduce total production capacity by 400,000 units per year. In 2007, eliminate a shift at Newark (Delaware) Assembly Plant and the Warren, Mich., Truck Plant. In 2008, eliminate a shift at St. Louis South Assembly Plant. Idle Newark Assembly Plant in 2009. Idle the Cleveland Parts Distribution Center in December 2007. Adjust powertrain, stamping and component operations to reflect reduced capacity.
    Employee Reduction
    Overall, Chrysler Group will reduce the number of employees by 13,000, or approximately 16%. Hourly employment will be reduced by 11,000 over three years, with 9,000 in the U.S. and 2,000 in Canada (4,700 in the U.S. and 1,100 in Canada in 2007 alone). Of the U.S. hourly total, 4,000 employees will be impacted by assembly plant actions; 1,000 by reduced capacity in powertrain, stamping and other component operations; 1,000 by other actions including the potential sale of support functions; and 3,000 through technology, efficiency and productivity. Salaried employment will be reduced by 2,000 over the next two years, with 1,000 each in 2007 and 2008. Special retirement programs and other termination and attrition programs will be announced separately.
    Source: CompanyThe company said that it expects to take restructuring charges of up to €1 billion in 2007. It also said that it sees its loss from ongoing operations this year coming in less than last year's figure.

    In addition to closing the Delaware plant by 2009, Chrysler will eliminate a shift at the plant this year. The company will also eliminate a shift at its Warren, Mich., truck plant in 2007 and will eliminate a shift at its St. Louis South Assembly plant next year. Chrysler is also planning to idle its Cleveland parts-distribution center in 2009.

    The company said it will explore the sale of support operations, including transportation services, while working to reduce and optimize its dealer network to improve dealer profitability. The company also emphasized that it will continue its product offensive, with eight new and five refreshed products in 2007. Chrysler also said it will make better use of the alliances and partnerships it already has around the world.

    Many industry observers, however, will be focused on what kinds of options DaimlerChrysler could pursue beyond those announced Wednesday.

    John Casesa, managing partner at New York-based Casesa Strategic Advisors, said the board's statement on considering all options represents a "dramatic change in tone" from DaimlerChrysler regarding the future of the Chrysler Group.

    "A decision on Chrysler's future is tantamount to a decision on DaimlerChrysler's future," said Mr. Casesa. "They have a choice, either full integration with Mercedes to achieve the full benefits of the merger or complete separation."

    Last year, DaimlerChrysler denied any intention to sell Chrysler after an executive sidestepped questions on that matter during a conference call.

    Officials from DaimlerChrysler and Chrysler are speaking this morning at a press conference in Michigan and later will hold a conference call with analysts.

  2. #2
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    Quote Originally Posted by Cgoodsp466
    In the private sector things get cut back and people lose jobs.In the public sector we just raise taxes an hire more people.School districts and Towns take notice on what the big boys do.
    Yes, they also have to be more productive in their job, with less workers.

    The companies have to look at how to do things, better, snarter, to re-invent themselves, change how they do business, workers learn new skills, do different jobs than what they were hired for, report to new managers, and be resaponsible for their work.

    Micheal

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    BPD is doing the same thing

    Cut 30% of it's work force in the last 5 yrs.
    They hate us till they need us.

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    Unregistered Cgoodsp466's Avatar
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    Quote Originally Posted by PBAguy
    Cut 30% of it's work force in the last 5 yrs.
    Thats becuase of population lose and unfilled positions smoke and mirrors. See the Chrysler people I feel sorry for.

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    Quote Originally Posted by PBAguy
    Cut 30% of it's work force in the last 5 yrs.
    Sure, but not without a fight, even though the # of citicins went down, the UNion fought the cuts all the way.

    I noticed you did not repsond to the other points I also made, which the union is fighting, or has fought all the way.

    Can not do business the old way, as the OLD is no longer.

    Micheal

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    Not without a fight

    Hey J-off, 202 cuts were negotiated . The others came in 02' when the City cut 96 Cops , laying off 32. And as B-Cop pointed out earlier, you don't have to put your name at the end of your posts. They are already at the top.
    They hate us till they need us.

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    Quote Originally Posted by PBAguy
    Hey J-off, 202 cuts were negotiated . The others came in 02' when the City cut 96 Cops , laying off 32. And as B-Cop pointed out earlier, you don't have to put your name at the end of your posts. They are already at the top.
    You, a person who is supposed to be a profeessional stupping to name calling. No wonder people have a negative attitute toward certain police officers. Look how you act.

    You and your friend still have not answered the rest of my post, I have noticed.

    As to my name at the end of the posts, Just because I do not have to do it, does not mean that I can not do it. I prefer to sign my posts, I am used to signing the things (in writing) that I create, it is one way of taking ownership to what I write.

    Micheal

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    Quote Originally Posted by Micheal Joseph

    You and your friend still have not answered the rest of my post, I have noticed.
    We may have less citizens...but don't we continue to have more calls for police service? Just like the fire department. Many of the buildings may be vacant, but they can still burn, no?

    Public service is not like private industry, no matter how many ways you try to frame it, the differences outweigh the similarities.

    b.b.

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    you don't comprehend

    mikey, you dont read or understand. its ok though, youll be fine.
    They hate us till they need us.

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    Quote Originally Posted by BorderBob
    We may have less citizens...but don't we continue to have more calls for police service? Just like the fire department. Many of the buildings may be vacant, but they can still burn, no?

    Public service is not like private industry, no matter how many ways you try to frame it, the differences outweigh the similarities.

    b.b.
    It is amazing how other cities with the same population can do with less, but Buffalo can not?

    maybe it is the attitute of the workers that is the cause of the "can not" attitute.

    Micheal

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    Quote Originally Posted by PBAguy
    mikey, you dont read or understand. its ok though, youll be fine.
    Oh I do read, and I read quite well. I also comprehend when there is an intelligent conversation going on.

    Unfortunatly conversing with you I find very little of both, as is shown in many posts to/from you and to/from others.

    By the way, I am really fine, and make lots of money by being able to point out the difference between what people say and how they say it. Comes in quite well, when I deal with the government.

    Micheal

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    The American Economy creates over 36,000 new jobs every week, and every week, thousands of people create new businesses. SO... it's not so bad for the employees, they have unlimited opportunities if they SEE the reality. Chrysler has a different drum to beat on...

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    Mikey

    apparently not. I saw your post on another topic and without spell check I have to question how much schooling you have had. Wow.
    They hate us till they need us.

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    "In the private sector things get cut back and people lose jobs.In the public sector we just raise taxes an hire more people.School districts and Towns take notice on what the big boys do."

    How about a few years back when it was announced that the Buffalo school budget was increasing even though their student population was declining due to charter schools?

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    tough call

    Public employees are a necessity. They have to run and don't have the option of going down. If Chrysler shuts down, oh well. There are a lot of other car companies around. You aren't going to close down a Police Dept. So I don't think you can compare the jobs of private companies to public servants. I have yet to get a phone call where my Lt says, we don't need you tonight, stay home. That is why the Taylor law was enacted. To ensure that there will always be Civil Servants on duty.
    They hate us till they need us.

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