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Chrysler begins round of buyouts

March 01, 2007|John O'Dell | Times Staff Writer

Chrysler Group and the United Auto Workers union said Wednesday that they had reached agreement on a buyout and early-retirement plan aimed at helping the ailing automaker slash 9,000 hourly jobs from its U.S. payroll.

In letters sent this week to thousands of the company's manufacturing workers, Chrysler is offering a $100,000 cash buyout or, to those eligible, an early-retirement package that includes a $70,000 cash payment.

Spokesman Mike Abrerlich said the automaker, the U.S. arm of DaimlerChrysler of Germany, expects about 4,500 workers to accept one of the deals this year. Chrysler Group will offer new buyout and retirement plans next year and in 2009 as it completes a restructuring plan announced last month, he said.

The Auburn Hills, Mich.-based company, which builds and markets the Dodge, Chrysler and Jeep brands, lost $1.5 billion last year as U.S. sales of its large pickups and sedans slumped amid heightened demand for more fuel-efficient vehicles.

To match production to its U.S. sales prospects, Chrysler Group aims to cut annual production by 400,000 vehicles a year.

The automaker -- which DaimlerChrysler may be trying to sell -- has launched a North American restructuring plan that calls for the elimination of 13,000 jobs, closure of one assembly plant and production cuts at several others.

Chrysler Chief Executive Tom LaSorda has said the company needs to eliminate 2,000 salaried positions, most of them in the U.S., along with 9,000 manufacturing jobs in the U.S. and 2,000 in Canada.

The company and the Canadian Auto Workers union previously agreed on buyout and retirement terms that mirror those in the U.S. plan.

The $1.3-billion recovery effort is expected to return the automaker to profitability by next year, LaSorda said.

United Auto Workers President Ron Gettlefinger, in a message on the union's website, said the agreement meant members were "once again stepping forward to make hard choices."

"Now it's up to DaimlerChrysler to move the company forward by using the skill and dedication of our members to deliver quality vehicles that customers want to buy," he said.

But the German parent company appears to be looking to rid itself of Chrysler instead and reportedly is talking to several investment groups, as well as General Motors Corp., about the possible sale of Chrysler, which it acquired in 1998.


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