DaimlerChrysler to Cut 26,000 Jobs

Date 2001/2/2 0:00:00 | Topic: Sales


You've no doubt heard the news by now - DaimlerChrysler has announced that it is going to be cutting 26,000 jobs from its Chrysler division in order to return the American arm of the company to profitability. How is the Jeep nameplate affected by all this - both the Jefferson North (Grand Cherokee) and Toledo (Cherokee, Liberty, and Wrangler) plants will eliminate one shift of workers. Here's a snippet from the CNNfn story:

DaimlerChrysler unveiled Monday its plans to slash 26,000 jobs at its sputtering Chrysler arm over three years.

The reduction of about 20 percent of Chrysler's work force is part of a restructuring plan aimed at bringing the North American division back to profitability. The company also said it will idle six of its 50 worldwide plants through 2002, as well as eliminating shifts or cutting production at another seven assembly plants.

The United Auto Workers union, which represents hourly workers in the United States, had no immediate comment on the closings and staffing cuts. The Canadian Auto Workers union, which represents hourly employees there, said it would work to minimize the impact on its members.

...snip...

The planned shift changes, plant closings and idling of factories will reduce Chrysler's overall output by about 15 percent, the company said. The German-American automaker said 75 percent of the job cuts would be made this year and that the cuts were in line with its union contracts. It also said it believed most of the job cuts will be accomplished through retirement programs, although Dieter Zetsche, Chrysler's new CEO, said there would a need for layoffs, primarily among salaried staff. There would also be some cuts in salaried compensation this year.

Chrysler, the third-largest North American automaker, announced a $512 million loss in its operations in the third quarter last year, and published reports indicate that it lost about $1.25 billion in the fourth quarter. The company has blamed the high cost of launching new vehicles and a competitive U.S. market.As part of Monday's announcement, Juergen Schrempp, the chairman of DaimlerChrysler, issued a statement saying, "I have full confidence in the management team under the leadership of Dieter Zetsche. These measures will substantially help to turn around the Chrysler Group."

But Schrempp has himself been under fire. Billionaire investor Kirk Kerkorian, the largest U.S. shareholder, in November filed an $8 billion lawsuit claiming he was hoodwinked by Schrempp with false promises the deal would be a merger or equals. Kerkorian has sold a chunk of his shares since filing the suit.

How will this affect the launch of the Liberty? So far, there has been no word, which is this case, seems like at least a bit of good news.





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