US automaker Chrysler LLC said Wednesday it plans to eliminate an additional 1,000 white-collar jobs by the end of September, citing challenging US market conditions.
David Elshoff, a spokesman for Chrysler, said the struggling automaker hopes to use attrition and retirements to trim its ranks.
However, the company is leaving the door open to involuntary cuts in order to reach its goal, he said.
Chrysler, which was sold by Germany's Daimler AG last August, currently has a total of 18,500 salaried employees in North America and at outposts in Asia and Europe.
All salaried employees are eligible for the separation packages, the spokesman said.
The new job cuts come on the heels of the automaker's announcement last month that it would close permanently in October the company's minivan plant in St. Louis, Missouri, and eliminate a production shift at a second plant in St. Louis.
“Chrysler has a clear, long-term strategy to build a profitable enterprise, even in this challenging economy. 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,” Elshoff said.
“However, the signs of economic challenge continue for the US market and as a result, further actions must be taken to improve our business and return to profitability,” he said.
J.D. Power and Associates said Wednesday it was trimmings its forecasts for new light-vehicle sales in the US to 14.2 million units in 2008, marking a 12 percent decrease from 16.1 million units in 2007.
The forecast revision — which represents a reduction of 750,000 units from 14.95 million projected earlier this year — was prompted by a deteriorating economic environment, prolonged effects wrought by the credit crisis, elevated gas prices and a reduction in the daily rental fleet market, the research group said in a statement.
Rental fleet sales were projected to drop to 2.6 million units — a 21 percent plunge from 2007. Retail sales, which are reflective of actual consumer behavior in the new-vehicle marketplace, are expected to decline by 10 percent to 11.6 million units, J.D. Power said.
“While the sluggish economy is the primary driver of the reduction in retail sales, fleet sales are expected to experience an even steeper decrease from 2007,” said Jeff Schuster, executive director of automotive forecasting for J.D. Power and Associates.
“This trend indicates that the automotive industry is making serious efforts to continue reducing fleet sales, while also allowing retail sales to work through the downturn without heavy use of incentives.”
