Chrysler to cut 25% of salaried workers, 4,300 jobs
rob
October 24, 2008 - 11:07 am ET
UPDATED: 10/24/08 2:12 p.m. EDT
Chrysler LLC plans to cut its salaried workforce by 25 percent starting next
month, the company said today.
A Chrysler statement did not identify how many jobs the automaker is
eliminating, but spokesman Michael Palese said the cuts will total 25
percent of the company's salaried workforce.
Chrysler, according to its most recent figures, employs about 17,332
salaried workers, so the cuts could total more than 4,300 jobs.
The cuts will start with voluntary retirements and buyout programs, but will
include layoffs by the end of the year. New buyout programs will include
"enhanced benefits," a Chrysler statement said, including cash and
new-vehicle vouchers.
The company also told employees it will "cut back on all discretionary and
overhead expenses and reduce capital expenditures not connected to major
product programs."
Chrysler owner Cerberus Capital Management LP, according to numerous
reports, is in the midst of negotiating a possible sale to General Motors.
Cerberus also has engaged in discussions with Nissan and Renault about a
partnership arrangement with Chrysler, according to the reports.
Chrysler just completed a reduction of 1,000 salaried jobs last month. And
yesterday, the automaker said it would close its assembly plant in Newark,
Del., and cut a shift at its Toledo Jeep operations, resulting in 1,825 job
losses.
Chrysler has announced 35,000 total job cuts since February 2007, according
to Bloomberg News.
GM also is expected to announce another round of significant salaried job
cuts by the end of the year.
"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, Mich., told Bloomberg. "It's not
surprising that drastic actions are being taken because these are drastic
times.'"
'Truly unimaginable times'
CEO Bob Nardelli released a statement attributing the latest job cuts to the
fastest contraction ever in auto industry sales.
"These are truly unimaginable times for our industry," Nardelli's statement
said. "We continue to be in the most difficult economic period most of us
can remember."
"The combination of troubled financial markets, difficult credit, volatile
commodity prices, the housing crisis and declining consumer confidence
continues to weigh on the economy. Never before have auto industry sales
contracted at such a fast rate. Throughout this challenging time for our
industry and our company, we have continued to face the realities of our
business environment, and working as a team, we have been right-sizing our
organization to become as competitive as possible."
PRESS RELEASE: Response to Query Regarding Additional Salaried Employee
Workforce Reductions
Auburn Hills, Mich., Oct 24, 2008 - In a letter to employees, Chrysler LLC
Chairman and CEO Bob Nardelli today announced that Chrysler would take
additional salaried and supplemental workforce reductions beginning in
November 2008.
This adjustment to workforce levels is in addition to previously announced
actions, and will be accomplished through a combination of socially
responsible programs, including voluntary retirements and - in order to
broaden the eligible group - salaried employee buyouts. These new programs
will feature enhanced benefits, including both cash and new-vehicle
vouchers.
Details on the new voluntary programs will be made available to Chrysler
salaried employees in the next two weeks (Oct. 24-Nov. 5, 2008). Involuntary
separations will also take place by the end of December.
The Company today also told employees that in order to more diligently
control spending, it would cut back on all discretionary and overhead
expenses and reduce capital expenditures not connected to major product
programs.
Nardelli added that Chrysler would make additional organizational and
restructuring announcements in the near future as the Company works to find
new ways to operate.
The following is attributed to Bob Nardelli, Chairman and CEO, Chrysler LLC:
"These are truly unimaginable times for our industry. We continue to be in
the most difficult economic period most of us can remember. The combination
of troubled financial markets, difficult credit, volatile commodity prices,
the housing crisis and declining consumer confidence continues to weigh on
the economy. Never before have auto industry sales contracted at such a fast
rate. Throughout this challenging time for our industry and our company, we
have continued to face the realities of our business environment, and
working as a team, we have been right-sizing our organization to become as
competitive as possible."