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Chrysler could cut more jobs, CEO says

Chrysler LLC could cut more jobs next year, after already slashing about 23,000 positions, if demand weakens faster than expected, Chief Executive Bob Nardelli said in a meeting for employees.
/ Source: Reuters

Chrysler LLC could cut more jobs next year, after already slashing about 23,000 positions, if demand weakens faster than expected, Chief Executive Bob Nardelli said in a meeting for employees.

“No matter what you read, no matter what you hear, it will be a tough economic marketplace,” Nardelli told employees during a town hall Web broadcast on Monday evening.

“It’s never an easy decision to shrink a company, but we felt we needed to get it right-sized,” he said. “We hope we were aggressive enough, and if not, we will adjust.”

A Chrysler spokesman confirmed Nardelli’s comments to the employees.

Nardelli, who became Chrysler’s CEO in August, announced in November that the company would cut as many as 10,000 hourly workers by April.

That would be in addition to about 13,000 jobs the automaker plans to eliminate over the next three years.

Nardelli’s comments on cutting the work force come as industry experts expect next year to be the U.S. auto industry’s worst in more than a decade.

Detroit’s Big Three automakers — General Motors Corp, Ford Motor Co and Chrysler — are bracing for industrywide sales of roughly 16 million units this year, the lowest tally since 1998.

While the automakers are expecting a roughly flat industry in 2008, top investors and analysts are more pessimistic, citing a weak housing market, high gas prices and tighter lending standards.

Thomas Stallkamp, a former Chrysler president and a partner with private equity firm Ripplewood Holdings, said at the Reuters Autos Summit last week that U.S. sales could dip to 14.5 million units in 2008, which would be the lowest tally in 15 years.

Jerry York, an adviser to billionaire investor Kirk Kerkorian, said at the summit that U.S. light-vehicle sales could slip to 15.5 million units or less next year.

Chrysler’s U.S. sales were down nearly 4 percent through October, even as the company offered incentives on many of its vehicles.

The automaker, which went private earlier this year when Daimler AG sold a roughly 80 percent stake to Cerberus Capital Management, has said it needs to cut capacity because of reduced demand.

Chrysler is also cutting four models to avoid an overlap of its vehicles.

Jim Press, who was lured away from Toyota Motor Corp in September to become president at Chrysler, said on the same Webcast that the automaker would adapt to softer demand in the United States.

“The customers who can afford to buy will shift down rather than go up in class of vehicle,” Press said. “The company that gives that customer more for their money will gain market share.”

Chrysler will also focus on expanding sales outside North America. Its share of the international market is just 1 percent.

Executives said on the Webcast that the company would announce joint ventures in countries such as India, China and Russia within the next six months.