Chrysler Corp. workers in Canada struck the company's six plants yesterday, causing Chrysler to lay off 2,500 employes in the United States effective Monday and raising new concerns about the automaker's fragile financial health.
Chrysler Vice President Thomas W. Miner warned that the strike by the 9,600 unionized workers at Chrysler Canada Ltd. could cause even greater damage, perhaps enough to shut down the entire company and put all of its 43,000 U.S. employes out of work.
A long strike by the United Auto Workers Union in Canada "will be extremely damaging and potentially ruinous to the company," said Miner, who heads Chrysler's industrial relations department.
Chrysler said there would be more layoffs next Friday if the strike is still on. "This strike comes when we are just beginning to turn the corner after three, long, lean years -- years in which employers, suppliers, dealers, lenders and communities where we do business all made sacrifices in an effort to save the company from certain collapse," Miner said.
Chrysler nearly skidded into bankruptcy in 1979. But its UAW workers in Canada and the United States sacrificed $203 million in wages and benefits that year, and kicked in another $243 million in 1980 and $622 million more in 1981 to help the company survive.
Other cost concessions from dealers, suppliers and banks aided Chrysler's quest for U.S.-backed loans, of which the company still owes $1.2 billion.
Largely through aggressive cost-cutting, Chrysler was able to turn modest profits -- $150 million in the first quarter of 1982 and $106.9 million in the second quarter. The company also amassed a seemingly large reserve of $1.1 billion in cash and marketable securities.
That comeback set the stage for what could become the company's undoing. Its Canadian and American workers, locked in three years of frozen wages, saw the company's recovery as a chance to make up for some of their concessions.
Chrysler's American UAW workers overwhelmingly rejected a tentative new contract last month and threatened to go on strike Nov. 1. But, facing payless Christmas holidays and pressure from the union's leadership, the U.S. workers voted on Oct. 26 to go back to the bargaining table with Chrysler as soon as possible after Jan. 1.
Miner and other Chrysler officials tried to win the same grace period from the company's workers in Canada, who were seeking an immediate addition to their base wage rate of $9.07 an hour in Canadian dollars.
But Robert White, the UAW Canadian director, said his members would strike and talk rather than work and wait.
"We are not trying to cripple the corporation, but Chrysler has to understand the determination of the Canadian workers," White said Thursday night.
The Canadian union walked out promptly at the 10 a.m. strike deadline yesterday.
The Canadian workers are about $3 an hour behind employes at General Motors Corp. and Ford Motor Co. plants in Canada. U.S. Chrysler workers are about $2.60 an hour behind GM and Ford employes in domestic plants.