Report: More white-collar job cuts at Chrysler

Auto manufacturer's board approves even deeper cuts in salaried and contract staff than previously announced, newspaper says.


NEW YORK (CNNMoney.com) -- Chrysler LLC, fresh off winning millions in cost savings in a deal with the United Auto Workers, is set to cut deeper into its white-collar work force, according to a published report.

The Detroit News reported Wednesday that the board of Chrysler approved a cut of at least 1,000 salaried workers, as well as contract employees. The paper said the company may also look to eliminate some shifts at factories as it tries to bring capacity more in line with reduced demand for its products.

Chrysler headquarters in Auburn Hills, Mich., could see deeper staff cuts as a report says the automaker's board has approved a cut of 1,000 salaried workers.
Chrysler headquarters in Auburn Hills, Mich., could see deeper staff cuts as a report says the automaker's board has approved a cut of 1,000 salaried workers.

Only three weeks ago sources familiar with Chrysler's plans said the company was looking to trim about 5 percent of its salaried staff, a cut that came to a bit more than 400 jobs, as well as 1,100 contract employees.

On Saturday the United Auto Workers union announced its rank and file membership had ratified a new four-year labor deal with Chrysler. The deal shifts responsibility for retiree health care costs to union-controlled trust funds, and establishes a two-tier wage structure for new hourly hires filling jobs not on the assembly lines.

The deal was reached after a brief six-hour strike. It passed with the support of 56 percent of production workers and 51 percent of skilled trade workers, according to the union. Many union members expressed concerns about concessions such as the two-tier wage structure, as well as the lack of job guarantees that had been won by the union in its contract with General Motors (Charts, Fortune 500).

The latest round of cuts at Chrysler would be on top of the 11,000 hourly positions and 2,000 salaried jobs that Chrysler announced in February that it planned to cut in the coming years primarily through buyouts. Those cuts come more at the plant level, while the latest reductions are likely to be concentrated more at company headquarters in Auburn Hills.

Three weeks ago the company said that 1,100 of the planned 2,000 reduction in salaried jobs had already been eliminated, which it said was 100 more positions than the target at that time.

The meeting of the Chrysler board is the first since it was purchased by Cerberus Capital Management in August. The paper reports that the board also announced it would drop four vehicles with weak sales from its product lineup - the Dodge Magnum wagon, Chrysler Pacifica crossover, PT Cruiser hatchback and the Chrysler Crossfire roadster.

The PT Cruiser, once a major hit for Chrysler, has seen sales for the first three quarters of this year down 27 percent from the same period last year to 77,383. The Magnum and Pacifica have also seen sales tumble about 30 percent so far this year, while the Crossfire is a niche vehicle which had sales of only 8,290 vehicles through September.

Overall, U.S. sales at Chrysler LLC, which includes the Chrysler, Dodge and Jeep brands, are down 3 percent from year-ago levels. That's less than the 6.6 percent drop at GM or the 13.3 percent plunge at Ford Motor (Charts, Fortune 500). But it still leaves Chrysler in fourth place and losing ground to Asian automakers such as Toyota Motor (Charts) and Honda Motor (Charts). Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.