Friday, October 24, 2008
WASHINGTON -- Chrysler LLC plans to cut 25 percent of its salaried work force by Jan. 1, with some involuntary layoffs, Michigan congressional aides briefed on the matter said.
The company confirmed that it would cut a quarter of its work force and dramatically cut capital spending. In a letter to employees, Chrysler LLC Chairman and CEO Robert Nardelli today announced that Chrysler would take additional salaried and supplemental work force reductions beginning in November.
In a statement Chrysler said "this adjustment to work force levels is in addition to previously announced actions, and will be accomplished through a combination of socially responsible programs, including voluntary retirements and -- in order to broaden the eligible group -- salaried employee buyouts. These new programs will feature enhanced benefits, including both cash and new-vehicle vouchers."
Chrysler also told employees that to more diligently control spending, it would cut back on all discretionary and overhead expenses and reduce capital expenditures not connected to major product programs.
Chrysler's majority owner, Cerberus Capital Management LP, has been in talks with General Motors Corp. and Renault-Nissan about strategic alternatives for Chrysler, including a GM-Chrysler merger. Chrysler's statement was the strongest that a deal of some sort would be worked out, adding "that Chrysler would make additional organizational and restructuring announcements in the near future as the Company works to find new ways to operate."
Chrysler said details on the new voluntary programs will be made available to Chrysler salaried employees in the next two weeks, between Oct. 24 and Nov. 5. Involuntary separations will also take place by the end of December.
"These are truly unimaginable times for our industry.
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."
LINK: Chrysler to cut 25 percent of salaried work force | The Detroit News | detnews.com