Friday, October 24, 2008

Chrysler to cut salaried workforce by 25%

Chrysler CEO Bob Nardelli told employees today that the automaker plans to reduce its salaried and supplemental workforce by 25% beginning in November.

“As business conditions today continue to decline, and we prepare for economic challenges extending into 2009, additional actions will be needed to re-size our company to remain competitive,” Nardelli said in the memo obtained by the Free Press. “Due to the unprecedented conditions in the auto industry, both in our home and international markets, we are targeting a 25 percent reduction in our salaried and supplemental work force. As always, we will strive to do this in a socially responsible way, with respect and gratitude to those who have contributed so much to our company over the years.”

The total reduction will be around 5,000, the Free Press is told.

Voluntary termination programs will be made available to salaried employees beginning in November, he said.

“These new programs will be available to a broader group than before and will feature enhanced benefits, including both cash and new-vehicle vouchers,” he said. “Your management will share all the program details with you in the next few days. I hope that every eligible employee takes time to seriously consider these enhanced offerings given the current environment. In addition, it will be necessary to have involuntary separation actions at the end of December.”

Furthermore, Nardelli said, Chrysler will be eliminating or cutting back on all discretionary and overhead expenses.

“As an additional cost savings measure, we also will be reducing capital expenditures, but I assure you that we are protecting all major product programs,” he said.

The cuts come on top of 29,000 job eliminations already announced by Chrysler over the past two years.

The job cutting began in February 2007, when the automaker said it would cut 13,000 jobs by 2009. Then in November 2007, the automaker announced it would cut 12,000 more jobs, including around 1,000 contract workers.

In June of this year Chrysler announced 2,400 more hourly jobs would be lost with the closure of a pickup plant and elimination of a shift at a minivan plant, both located near St. Louis.

Then in July, Chrysler announced 1,000 more white-collar job cuts.

On Thursday, Chrysler announced it was closing its Newark, Del., assembly plant a year earlier than planned and reducing a shift at its Jeep plant in Toledo.

The announcement meant an additional 825 job cuts than previously announced.

Chrysler employs around 66,000 people around the world with 33,000 hourly workers and 15,871 salaried workers in the United States, according to the company.

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