Chrysler to Slash Thousands of Jobs in New Reorganization

Will cut 8,500-10,000 production jobs and 1,000 white-collar jobs.

Chrysler announced plans on Nov. 1 to slash 8,500 to 10,000 production jobs and other labor force reductions to deal with a "smaller market" in the U.S. The cuts, the first under Chrysler's new private equity owners, come on top of a reduction announced in February of 13,000 jobs including 11,000 production workers, or about 16% of its total labor force.

Chrysler, the number three U.S. automaker, said it was taking the actions in response to industrywide volume reductions and slower sales that call for "plant adjustments." The company said it was also halting production of four Chrysler models while adding two new vehicles and two new hybrid autos to its lineup.

Chrysler said it would cut an additional 1,000 white-collar posts and reduce the use of outside contract employees by 37%. It will also eliminate overtime for all employees.

The actions come on top of the reorganization announced in February aimed at restoring profitability to Chrysler through a three-year "Recovery and Transformation Plan."

"The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint," said Bob Nardelli, Chrysler's chairman and chief executive. "Annual industry volume (U.S. market) then was running at a 17.2 million clip. Now, we expect a seasonally adjusted annual volume for 2007 to be significantly lower and carry over into 2008."

The company announced that it will eliminate four models through 2008, including the Dodge Magnum sedan, the convertible version of the Chrysler PT Cruiser, as well as the Chrysler Pacifica crossover and its Chrysler Crossfire roadster. In the same time frame, Chrysler will add two all-new products to its portfolio: the Dodge Journey and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango."These actions reflect our new customer-driven philosophy and allow us to focus our resources on new, more profitable and appealing products," added Jim Press, vice chairman and president. "Further, these product actions are all in response to dealer requests."

Chrysler will be cutting shifts at several U.S. and Canadian plants as part of the streamlining. But it said it remains committed to its pledge to the United Auto Workers, to spend more than $15 billion on products, plants and engineering during the life of the latest contract through 2011.

The actions come as struggling US automakers have been losing ground rapidly to Asian rivals with a lower cost structure. Both Ford and General Motors have made deep cuts in their workforces. According to the consulting firm Challenger Gray & Christmas, some 800,000 U.S. auto industry jobs have been eliminated since 1999.

Copyright Agence France-Presse, 2007

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