Analysts say 10,000 hourly workers probably will lose their jobs as part of DaimlerChrysler’s effort to cut costs at its Chrysler Group by more than $2 billion, or $1,000 for every car sold in the United States.
AUBURN HILLS, Mich. (AP) — Analysts say 10,000 hourly workers probably will lose their jobs as part of DaimlerChrysler’s effort to cut costs at its Chrysler Group by more than $2 billion, or $1,000 for every car sold in the United States.
Thousands of Chrysler workers were waiting to learn whether they will remain part of a leaner, more competitive company Wednesday, when DaimlerChrysler AG (DCX) planned to announce a major restructuring at the headquarters of its U.S. operations.
In addition to the hourly workers, analysts estimate another 1,000 to 1,500 salaried workers could be given pink slips.
Company officials wouldn’t comment ahead of the announcement, which was to come after action by the German parent company’s board. DaimlerChrysler’s 2006 earnings also were to be released at the same time.
Much of the downsizing, analysts believe, will come at plants that make truck-based products, victims of the change in consumer tastes from sport utility vehicles and trucks to more fuel efficient car-based vehicles.
Atop almost all of the analysts’ lists of plants likely to be closed is the 2,100-worker factory in Newark, Del., that assembles the slow-selling Dodge Durango and Chrysler Aspen midsize SUVs.
Analysts say the Mack Avenue Engine Plant 1 in Detroit, with about 530 employees, also is a possibility because it makes the 4.7-liter V-8 engines that go in slow-selling trucks. And a 2,330-worker plant near St. Louis that makes Ram pickups also is on many lists because Chrysler has two other plants that make the Ram. Shifts also could be cut at other plants.
Workers have heard rumors about possible buyouts or early retirement offers similar to those offered by Ford Motor Co. (F) and General Motors Corp. (GM) to reduce their hourly work forces by tens of thousands.
Chrysler lost $1.5 billion in the third quarter of 2006, and its sales were down 7 percent last year. Trucks and bigger SUVs historically account for about 70 percent of the company’s U.S. sales, more than any other manufacturer.
The company’s future vehicles, analysts say, likely will share more underpinnings and parts with Mercedes vehicles as DaimlerChrysler moves to save money by building more models on common platforms.