Chrysler to cut up to 12,000 jobs in effort to slash costs

DETROIT — Chrysler LLC said Thursday it plans to cut up to 12,000 jobs, or up to 15 percent of its workforce, as part of an effort to slash costs and match slowing demand for some vehicles.

The automaker will cut 8,500 to 10,000 hourly jobs through 2008 and salaried employment by about 2,100. It will eliminate shifts at five North American assembly plants and eliminate four models from its line-up.

The cuts come in addition to the 13,000 layoffs Chrysler announced in February as part of a massive restructuring plan. Those cuts included 11,000 production jobs and 2,000 salaried jobs. The new round of cuts was expected to involve buyouts or early retirement packages similar to those made in February.

"The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint," Bob Nardelli, Chrysler's chairman and chief executive, said in a statement.

As part of the new plan, shifts will be cut in Belvidere, Ill., Toledo, Ohio; Brampton, Ontario; Jefferson North in Detroit and a plant in Sterling Heights. Also, a shift will be cut at the company's Mack Avenue engine plant.

The announcement comes just days after the United Auto Workers union ratified a four-year deal with the automaker. Chrysler became a private company in August when DaimlerChrysler AG, now called Daimler AG, sold 80.1 percent of Chrysler to the private equity firm Cerberus Capital Management LP.

The company announced it will eliminate four models through 2008, including the Dodge Magnum wagon, the convertible version of the Chrysler PT Cruiser, the Chrysler Pacifica crossover and the Chrysler Crossfire sportscar.

In the same time frame, Chrysler said it plans to add two new products: the Dodge Journey crossover and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango.