Chrysler to Cut up to 5,000 Jobs by Year-End

Oct. 24, 2008
White-collar and supplemental workforce positions will be eliminated

"Twenty-five percent of the combined white-collar and supplemental workforce" positions will be eliminated, Chrysler spokesman David Elshoff said. "It's likely that every facility Chrysler has around the world will be affected by these reductions," he said. The job eliminations "could represent up to 5,000."

To achieve the workforce reduction, Chrysler plans voluntary employee buyout departures in November. "If we don't make our numbers and need to expand it to involuntary actions, those will take place by the end of December," he said.

Chrysler announced on Oct. 23 it was cutting production in the U.S. "in response to the continuing global economic slowdown and auto industry contraction, as well as the market's continuing movement toward smaller vehicles.

Chrysler said it was eliminating one shift of production at a plant in Toledo, Ohio, and will advance the closure of an assembly plant in Newark, Delaware, both to take effect on December 31. The shift elimination affects 825 jobs and the Delaware plant closure will result in the loss of some 1,000 jobs.

"The markets are facing unprecedented turmoil and we are in a time of historic change in the auto industry," Frank Ewasyshyn, executive vice president of manufacturing at Chrysler, said in announcing the production cutbacks. "These tough, but necessary steps are vital to our long-term viability," he said.

Daimler said on Oct.23 that its remaining 20% stake in Chrysler was now worthless on its books and that it was still in talks to sell the share to Chrysler's majority owner, private equity firm Cerberus. "The book value is zero," Daimler's finance chief Bodo Uebber said in a conference call after the company issued a profit warning in the face of what it called "very challenging" market conditions."

Daimler bought Chrysler in 1998 and last year sold an 80.1% stake to private equity group Cerberus for $7.4 billion, a fraction of what it first paid for it after nine unhappy and loss-making years.

Chrysler is reportedly in merger talks with General Motors.

Copyright Agence France-Presse, 2008

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