Chrysler to cut up to 12,000 jobs
DETROIT - With the ink barely dry on a four-year labor contract, Chrysler L.L.C. said it planned to cut up to 12,000 jobs and remove four models from its lineup. The moves announced yesterday stunned workers and suggested that the now-private Chrysler would not hesitate to cut production and jettison vehicles that were selling poorly.
DETROIT - With the ink barely dry on a four-year labor contract, Chrysler L.L.C. said it planned to cut up to 12,000 jobs and remove four models from its lineup.
The moves announced yesterday stunned workers and suggested that the now-private Chrysler would not hesitate to cut production and jettison vehicles that were selling poorly.
Chrysler said it would cut 8,500 to 10,000 hourly jobs and 2,100 salaried positions - about 15 percent of its workforce - through 2008. The cuts would come on top of 13,000 layoffs that Chrysler announced in February.
Chrysler also will eliminate shifts at five North American assembly plants and cut four models, including the slow-selling PT Cruiser convertible and Dodge Magnum wagon. The company's assembly plant in Newark, Del., will not be affected.
Chrysler officials said falling demand for vehicles in the U.S. market made the cuts necessary. The company's sales fell 3 percent in the first nine months of this year, according to Autodata Corp., and Chrysler said it expected sluggish sales in 2008.
"We have to move now to adjust the way our company looks and acts to reflect a smaller market," Chrysler vice chairman and president Tom LaSorda said.
Most workers will be offered buyout or early-retirement packages.
"Our union will make sure our members receive all of the benefits and protections to which they are entitled under the contract," UAW spokeswoman Christine Moroski said.
Industry analysts said the cuts were needed to avoid overproduction, which leads to high inventories, angry dealers, and costly incentives to move cars off dealers' lots.
Chrysler, which became a private company in August, is now better equipped to make those changes, since it does not report earnings and can afford to take a short-term hit paying for buyouts.
Shifts will be cut at vehicle-assembly plants in Belvidere, Ill.; Toledo, Ohio; Brampton, Ontario; and Jefferson North and Sterling Heights in the Detroit area. Also, jobs will be cut at the company's Mack Avenue engine plant in Detroit.