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Chrysler to Cut 25 Percent of Salaried Workers, 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 says, including cash and new-vehicle vouchers.

October 24, 2008
Chrysler plans to cut its salaried workforce by 25 percent starting next month, the company said Friday, October 24.

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. It also has engaged in discussions with Nissan and Renault about a partnership arrangement, according to the reports.

CEO Bob Nardelli released a statement attributing the 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.”

Filed by Chrissie Thompson and Philip Nussel of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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