Chrysler eyes cutting 1,500 non-union jobs
Automaker eyeing 5 percent cut in salaried staff, more than one-third reduction in contract employees as it tries to negotiate new cost savings with union.
NEW YORK -- Chrysler, which is in the process of trying to win cut cost in the marathon talks now taking place with the United Auto Workers union, will be looking to cut about 1,500 jobs out of its non-union staff as well.
Sources familiar with the company plans says it is looking at trimming an additional 5 percent of its white collar work force, or a bit more than 400 jobs, primarily at the company's headquarters in Auburn Hills, Mich., just outside Detroit. In addition about 37 percent beyond the company's 3,000 contract employees would also be cut as part of the cost-cutting effort. That comes to roughly an additional 1,100 jobs.
The planned cuts in the nonunion staffing come as the company still moves forward with plans for a broad staff reduction announced as part of a turnaround plan announced on Feb. 14.
At that time, the company announced plans to eliminate 2,000 salaried jobs, along with 9,000 positions now held by UAW members and an additional 2,000 hourly jobs in Canada. So far 1,100 salaried jobs have also been cut, which is 100 more positions than the target at this time. Many of the future salaried cuts that will be part of that cost cutting will come about as Chrysler moves to close plants and distribution centers as part of its turnaround plans, which will result in less need for supervisory employees.
As to the hourly jobs cuts announced in February, about 6,000 union members in the United States and Canada have already left the company as part of the company's cost-cutting efforts. The full range of cuts announced eight months ago are due to be completed by 2009.
Since the cost-cutting program was announced, Chrysler LLC has been sold to private equity firm Cerberus Capital Management, which is trying to move more quickly to reverse the $1.5 billion in losses at Chrysler in 2006. Chrysler LLC includes the Chrysler, Dodge and Jeep brands.
The current labor talks with the UAW are a key to those cost-cutting efforts, with the union seeking to match significant cost savings, particularly in spending on health care, already won from the UAW by General Motors.
Negotiators engaged in a marathon session Monday night that went until about 3:30 p.m. ET Tuesday, according to a person familiar with the talks.
The union has set an 11 a.m. ET strike deadline for Wednesday morning, as a note from UAW President Ron Gettelfinger to locals at Chrysler on Monday said that the company has "thus far failed to make an offer that adequately addresses the needs of our membership."
But Gettelfinger's note stopped short of saying that the roughly 45,000 UAW members still working at Chrysler would go on strike Wednesday without a new labor agreement by the time. Instead his message said that union and management negotiators would need to have "achieved the basis for a tentative agreement" by the strike deadline in order to keep members on the job.
About 30 percent of UAW members at Chrysler are already off work this week, as Chrysler temporarily shut down half of its 10 assembly lines and one powertrain factory in order to bring the supply of vehicles more in line with the decreased demand for Chrysler products. Chrysler fell behind Toyota Motor to become the No. 4 U.S. automaker in terms of sales in 2006.
The UAW has selected Chrysler as the next focus of its contract negotiations, about a week after it reached an agreement with GM that ended a two-day strike there. Talks with Ford Motor are still on hold as Chrysler and the UAW try to reach a new agreement.