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29 January, 2001Announcing extensive restructuring, the auto multinational's Chrysler Group will cut 26,000 jobs and close six plants.
AMERICAS: On January 29, 2001, DaimlerChrysler, the world's fifth largest automaker, made known the next move in its aggressive plan to turn around the lossmaking Chrysler division. Blaming its problems on intense competition and the slowdown of the U.S. economy, Chrysler intends to reduce its workforce by 26,000 - or 20 per cent - over the next three years, and cut manufacturing capacity through the closure of six of its manufacturing plants by the end of 2002.
With regard to workforce reductions, unions are pushing for early retirement incentives in an attempt to lessen the impact on the workers and their families. The company has said that approximately 75 per cent of the job cuts would occur during 2001, mostly through retirement and attrition. Some 23,000 jobs will be lost in the U.S. and Canada, 2,600 in Mexico, and 500 in South America. The company will offer early retirement incentives to about 23,700 hourly and 4,920 salaried employees in the U.S. and Canada, thus the number of layoffs will depend on how many accept the retirement programmes.
Of the six plant closures, one is in the U.S. and five in Mexico and South America.
The Chrysler Group president and chief executive officer, Dieter Zetsche, has said that solutions would be "in line with the framework of our current labour contracts." The 1999 four-year collective agreements reached with the UAW in the U.S. and the CAW in Canada stipulate there will be no plant closures during this period.
CAW president, Buzz Hargrove, has stated that there will be "no concessions or opening of contracts." However, the company is planning to cut shifts or reduce the manufacturing rate in seven plants in Canada and the U.S. and hourly workers who get laid off will receive 95 per cent of their take-home pay.
With regard to workforce reductions, unions are pushing for early retirement incentives in an attempt to lessen the impact on the workers and their families. The company has said that approximately 75 per cent of the job cuts would occur during 2001, mostly through retirement and attrition. Some 23,000 jobs will be lost in the U.S. and Canada, 2,600 in Mexico, and 500 in South America. The company will offer early retirement incentives to about 23,700 hourly and 4,920 salaried employees in the U.S. and Canada, thus the number of layoffs will depend on how many accept the retirement programmes.
Of the six plant closures, one is in the U.S. and five in Mexico and South America.
The Chrysler Group president and chief executive officer, Dieter Zetsche, has said that solutions would be "in line with the framework of our current labour contracts." The 1999 four-year collective agreements reached with the UAW in the U.S. and the CAW in Canada stipulate there will be no plant closures during this period.
CAW president, Buzz Hargrove, has stated that there will be "no concessions or opening of contracts." However, the company is planning to cut shifts or reduce the manufacturing rate in seven plants in Canada and the U.S. and hourly workers who get laid off will receive 95 per cent of their take-home pay.