Chrysler LLC, the third-largest US automaker, will eliminate 25 percent of its salaried workforce, or about 4,300 jobs, starting next month as part of efforts to trim costs as sales slump.
The cuts will be completed by year’s end, the Auburn Hills, Michigan-based company said on Friday in an e-mailed statement. Chrysler, with 17,332 salaried employees as of September 30, also said it plans more “organisational and restructuring” changes.
Friday’s retrenchment plan came a day after Chrysler said it would end 1,825 jobs by closing a sport-utility vehicle plant in Newark, Delaware, and chopping a shift at a Jeep plant in Toledo, Ohio. Chrysler is fighting a 25 per cent decline in US sales this year, the most of any major automaker.
“These are truly unimaginable times for our industry,” Chief Executive Officer Robert Nardelli said in the statement.
He said “additional organizational and restructuring announcements”are planned “in the near future.”without giving details.
Besides the job cuts, Chrysler said it's also paring overhead and discretionary expenses and trimming capital spending not related to major products, without giving figures.
Merger Talks
General Motors Corp. and Chrysler owner Cerberus Capital Management LP are in talks about a possible merger, people familiar with the discussions have said. GM also is cutting additional salaried jobs and yesterday said it is suspending some employee benefits as it works to conserve cash amid declining sales in the U.S. and Europe.
The world's largest automaker said in a letter Oct. 22 to executives it would have to reduce salaried employment by more than the 5,000 jobs originally planned.
''Chrysler and General Motors have to do whatever is possible to stem the outflow of cash from the organization,'' said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. ''It's not surprising that drastic actions are being taken because these are drastic times.''
Chrysler has now announced cuts of almost 35,000 workers since February 2007. The company just completed the elimination of 1,000 salaried workers at the end of September, an action announced in July.
The automaker will offer voluntary retirement programs and buyouts to encourage people to leave. Workers who choose not to take packages will be open to firing.
The job cuts by Detroit-based GM and Chrysler will add to the burden in Michigan where the unemployment rate was 8.7 percent in September. The national rate was 6.1 percent.
