Chrysler LLC announced that it will cut about 1,000 salaried jobs by the end of September as part of its restructuring plans to survive the critical downturn in the U.S. automotive industry. Along with the 1,000 jobs, Chrysler is supposed to cut its contract work force as well.

The company has already sent a memo to employees regarding the details of reduction. The executive vice president for human resources and communications, Nancy Rae wrote in the memo, “To respond to the current market conditions, an incremental manpower reduction of 1,000 salaried employees by September 30, 2008, will be required.”

The company is responding to the continued deterioration in the U.S. automotive market and plans to  make incremental reduction in both salaried headcount and supplemental resources. As a part of the plans, the automaker is keen to take up a combination of retirements, buyouts and attrition programs to meet its goal.

Last year, Chrysler’s white collar workers were provided two early retirement deals. One of the deals allowed workers as young as 53, who had at least 10 years of service, to retire with full pensions and retiree health care, while other deal included workers of 60- year old or older, who would offer the same deal as the former along with either a vehicle voucher worth $20,000 after taxes or a $20,000 tax- free contribution to a retirement health care account.

Despite such actions, the company said that its liquidity position had remained unchanged through June this year, since December 2007.

“Through June 2008, the company’s liquidity position remained unchanged versus December 2007 as a result of aggressive programs to reduce working capital, the sale of non-core assets and volume-related manufacturing reductions," said Chrysler spokesman, David Elshoff. He further added, “However … further actions must be taken to improve our business and return to profitability.”

Chrysler has about 18,500 white-collar workers and a total of 2,700 third-party contractors worldwide.

This entry was posted on Friday, July 25th, 2008 at 8:16 am and is filed under Chrysler. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.