Chrysler to Cut 25% of Salaried and Contract Jobs

New York Times:

The automaker said that it would offer buyout and early retirement packages in the next two weeks and that layoffs would follow in December. As many as 5,000 people will lose their jobs, a Chrysler official with direct knowledge of the plans said.

"These are truly unimaginable times for our industry," Chrysler's chief executive, Robert L. Nardelli, wrote in a letter to workers. "We continue to be in the most difficult economic period most of us can remember. The combination of troubled financial markets, difficult credit, volatile commodity prices, the housing crisis and declining consumer confidence continues to weigh on the economy. Never before have auto industry sales contracted at such a fast rate."

Read the whole story: New York Times

Comments

[jeffp26]

I had no idea Chrysler still had employees.

[Paul]

I think they are now called "Associates" ... like at Wal-Mart.

[munki]

I hope they are cutting the top's as well..
for morale and to future promotion...
Learn from Japan how they fixed...

When a company is under performing...
Their response to shareholders...
Senior accountable executives bonus then salary cut before...
soldiers of the company...

I am not saying it is perfect, but...
our morale is down because... executives that are accountable remains in fat checks while...
needless to say...

The best way to grow the company is... for those senior accountable executives to know who are working for you...

I am qualified to state this... from what I experienced and have seen... nothing else.

[pjburns11]

But only the TOP 25% right?

Are we angry enough to put these bastardos in prison yet? That is where they belong, not cutting checks to themselves.

http://thetruthburns.wordpress.com/2008/10/24/put-these-wall-street-criminals-where-they-belong/

[William1950]

so when the auto manufacturers move their plants to mississippi and alabama so that they can pay them half as much, who can buy cars anymore... jobs are the answer, good wages are the answer.. duhhh

[themodernleader]

This country can not permit the destruction of our ability to make moving vehicles.

[joebaggadonuts]

In case you hadn't noticed, there's apparently nothing this country CAN do at the moment. Maybe with a new regime, we can point the productive power of America on making electric vehicles and renewable power. As for now, well, just watch.

[dorie12]

I work in a suburb of Detroit where I can see the Chrysler headquarters from my desk. Detroit is ground zero for the financial collapse in this country, not Wall Street. Because these workers, blue and white-collar alike, are mostly middle-class people, not ones who have made multi-million dollar bonuses in the last few years to carry them over.

It's not just about the crummy cars that you don't like. It's about media companies losing $ millions in ad revenue and all their sales reps losing commission. It's about suppliers closing shop (including my company), drug stores, restaurants, real estate brokers, bank loan officers, etc. The collapse of the domestic auto industry is about the collapse of the fabric in many parts of America -- not just the Midwest.

It's fair to say that short-sighted mediocrity on the part of the domestic auto companies is to blame. But what does that say about our country and how can we recover from our short-sightedness and mediocrity?

[joebaggadonuts]

Regime change. Management accountability. Facing facts.

[Paul]

It would have been better for Detroit if Henry Ford had been born in Kansas City.

Think about it - what would Michigan be without automobile manufacturing? A pleasant place to live.

[nomoreofthesame]

Guess that R&D program to make more gas guzzling cars didn't work out. Extinction was a long time coming and then wham, your history. A lot of folks were yelling fire for a long time and what did you do? Hum? Can't hear you.

[nomoreofthesame]

Where did my HUMMER go dude?

[joebaggadonuts]

Too bad they did not understand Taleb. My favorite is his parable about the turkey. "A Turkey is fed for a 1000 days—every days confirms to its statistical department that the human race cares about its welfare "with increased statistical significance". On the 1001st day, the turkey has a surprise." (It's called Thanksgiving).

The US auto manufacturers did have a program to make hybrids. They sh1canned it when the Dems were out of office. Toyota and Honda were not allowed to participate so they actually produced and sold hybrids. YTD, TM and HMC are down about 40 per cent. GM and F are down between 70 and 80 per cent in price.

Moral of the story. Don't believe your statistical department over your common sense, your gut, and your humanity.

[watchTVgetSTUPID]

That is what you get when bean counters who don't understand the business take over.

[iambusto]

actually its the idiotic managers who ruin the company. dont put a bad rep on bean counters.

contrary to popular opinion, bean counters actually understand true nature of risk and hence dont roll the dice :). they also are not hopelessly optimistic like finance guys.

[joebaggadonuts]

Bull. Consider Taleb's parable about the turkey.
"A Turkey is fed for a 1000 days—every day confirms to its statistical department that the human race cares about its welfare "with increased statistical significance". On the 1001st day, the turkey has a surprise." (It's called Thanksgiving).

The US auto manufacturers did have a program to make hybrids. They sh1canned it when the Dems were out of office. Toyota and Honda were not allowed to participate so they actually produced and sold hybrids. YTD, TM and HMC are down about 40 per cent. GM and F are down between 70 and 80 per cent in price.

Moral of the story. Don't believe your statistical department (or any bean counters who don't accept uncertainty) over your common sense, your gut, and your humanity.

[shyamg22]

i think what watchtvgetstupid was trying to say is that having marketing/finance/beancounting guys running car companies has been terrible. Honda, daimler, porsche (most profitable car company in the world), vw, bmw, all have ph.d auto/r&d auto engineers in the upper level of management. They actually let the guys that design cars, run the company. beancounters understand risk, but they also squeeze the last penny out of everything, which shows in the fact that manufacturing and material quality in domestics lags.

it is all about product. if you have that crack, you'll get people to come.

[JiminNC]

I suppose we will be expected to bail these fu@kers out ... AGAIN

[4everdem]

The article didn't say how much of a pay cut the CEO and his cronies took.

[MajorKong]

No, but I'll take a guess......

[Sundialsvc4]

Now there(!) are some executives who NEED to be FIRED... and quick!

First of all, if there's no sales, then there's no money to "buy out" anyone. So, maybe you want to break some union-agreements or some-such, and maybe you think that's gonna put you into a great competitive position, but the reality is that your company probably just won't last that long.

Think about it: you're a manufacturer. You make things. It takes a lot of training and expertise to make the things you do. But your accountants don't see that: they only see Dollar Bills, with utterly no idea (nor concern) for where those Dollar Bills, y'know, COME from.

What you're proposing to do is to wipe-out your CAPACITY to manufacture things. To dismantle your house. When times turn good again, you won't have the ability to regain that capacity: what you have right now is an investment that took dozens of years to create. What will happen, instead, is that your company will die.

Far better to say to Wall Street, "you know, our stock-price is going to SUCK. Earnings? Ain't gonna have 'em. Gonna lose money. But we're gonna spend that time upgrading our factories, retooling, doing things we were too busy to do before. We're gonna keep our people on the payroll. Times will improve, and when they do, Chrysler will be better than it ever was."

But no. They won't do that.

Who hired these guys, anyway?

[iambusto]

great....expand during time of recession.....haha where did you come from?

[thinkfreemind]

Actually... That is exactly what the company I work for is doing. They've had to make some cuts which are never easy, but that money savings is being used as a re-investment to upgrade our operations and make us better and stronger. Matter of fact, the new equipment and such has already started coming, so I think that's a good sign, for my job at least.

I feel sad for all those blue collar workers who are losing their jobs because their executives became more greedy over the years. I've seen that documentary 'Who Killed the Electric Car" and I believe that's pretty much the way it all went down too. I hope the workers losing their jobs in the auto industry can find work soon and wish them luck. Except for the corrupt people at the top of course.

[SENATORCALLENBOWE]

THERE GOES MY DODGE VIPER......

[anandakos]

Nardelli: "the most difficult economic period most of us can remember".

Three years ago "Nads" Nardelli was chief (and inspiration for the name) of Home Despot. Before that he was a slashbot at GE who got chuffed that Jack Welch selected Jeff Immelt instead of him to be the next CEO, so bailed.

The dude is NOT "a car guy". He was brought in by Cerberus (the guard dog of Hades....) to "reform" Chrysler. He's just doing his JOB, folks: separating the living from the dead.

[Paul]

This is less a reflection on the products Chrysler makes (lacking though they may be) than a reflection of the bankrupt condition of consumers. We spent all the phantom equity in our homes for the last few years, but now that well is dry. Good paying jobs have been outsourced, so the American consumer is no longer in a position to go into $30,000 debt every few years to buy a new automobile.

It is the breakdown of the automobile as the transportation paradigm in America that is the root of the problem for GM, Ford and Chrysler. We just can't afford to move 2000 lbs of steel with us every time we want to buy groceries.

But then, why should we?

[MajorKong]

Canary meet coal mine.