Some Valentine

News of the Year | February 2007 | Mindy Belz, Lynn Vincent

Chrysler announced plans to lay off 13,000 workers on Valentine's Day

Chrysler announced on Feb. 14 that it planned to lay off 13,000 workers at plants in Michigan, Delaware, Missouri, and Canada—cutting back 16 percent of its North American operations in what auto workers called the Valentine's Day Massacre. Experts have long forecast a major realignment for U.S. automakers, saddled with pension-heavy labor contracts and for too long reliant on gas-guzzling trucks and SUVs to fuel profits. But fewer analysts foresaw how deeply a downturn in the U.S. auto industry would contribute to, and in turn be affected by, a slump in home values and the crisis in debt markets. In auto-industry-dependent Michigan, home foreclosures have run more than two times higher than the national average—even before the home mortgage crisis spiked on the nation's radar screen.