Chrysler LLC said on Thursday it would cut up to 10,000 hourly jobs through 2008 as it slashes production capacity in North America and eliminates four slow-selling vehicles.
The announcement of the sweeping job cuts -- representing more than one-fifth of Chrysler's unionized work force -- came four days after workers at the privately held automaker narrowly ratified a new contract that had faced deep-seated opposition from union rank and file.
Chrysler said it will eliminate five North American assembly plants and stop making the Dodge Magnum sedan, the convertible version of the PT Cruiser, the Chrysler Pacifica and the Chrysler Crossfire.
In addition to the hourly job cuts, Chrysler said it would cut 1,000 salaried jobs, and eliminate almost 40 percent of its contract positions.
The layoffs are in addition to 13,000 jobs that Chrysler cut as part of its restructuring plan announced in February and mark the deepest job reductions undertaken by any of the embattled U.S. automakers.
The deep cuts showed Chrysler's new private equity owner Cerberus Capital Management putting its stamp on a more sweeping restructuring plan than it had endorsed when it acquired the automaker in August.
In a statement, Chrysler Chief Executive Bob Nardelli said the stepped-up restructuring plan was prompted by a weakening of market demand since February when Chrysler announced a turnaround plan targeting a return to profitability by 2009.
The market situation has changed dramatically in ... eight months, Nardelli said, adding that industry-wide auto sales were expected to be significantly lower than the pace of early 2007.
That weakness in the market would carry over into 2008, he said.
Chrysler Vice Chairman Jim Press, who was hired away from Toyota Motor Corp. to revamp the automaker's product strategy and mend its strained dealer relations, said in a statement that the company's 3,700 dealers backed the planned elimination of the slow-selling models.
These actions reflect our new customer-driven philosophy and allow us to focus our resources on new, more profitable and appealing products, Press said.
(Reporting by David Bailey and Poornima Gupta, writing by Kevin Krolicki)