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Chrysler extends buyouts to hourly workers

Chrysler  is offering buyouts of up to $100,000 to hourly workers at 11 of its U.S. facilities as part of its goal to cut up to 21,000 manufacturing jobs, or nearly half its U.S. hourly work force.
/ Source: The Associated Press

Chrysler LLC is offering buyouts of up to $100,000 to hourly workers at 11 of its U.S. facilities as part of its goal to cut up to 21,000 manufacturing jobs, or nearly half its U.S. hourly work force, a company spokeswoman said Monday.

Earlier this month, Chrysler made offers to workers at four assembly sites: Toledo North in Toledo, Ohio; St. Louis North and South in Fenton, Mo.; Belvidere, Ill.; and Jefferson North in Detroit.

On Monday, the offers were extended to seven additional sites in Michigan, including assembly plants in Warren and Sterling Heights; the Detroit Axle, Mount Elliott Tool and Die, and Mack Avenue Engine plants in Detroit; an engine plant in Trenton and a vehicle test center in Sterling Heights. Chrysler also gave the offer to 110 employees at the company's Auburn Hills headquarters who are in an hourly bargaining unit but are paid salaries.

A truck plant in Warren is down this week but is expected to get the same buyout offers when it resumes operations.

Chrysler spokeswoman Michelle Tinson said the company has eight other U.S. facilities that are still awaiting buyout offers. The company is working with the United Auto Workers union to determine when those will be introduced.

Chrysler has approximately 45,000 UAW-represented hourly workers.

Chrysler is in the midst of a restructuring after a majority stake in the automaker was sold last summer to private equity firm Cerberus Capital Management LP. The auto company announced in November it planned to cut up to 12,000 jobs, including 8,000 to 10,000 hourly and 2,000 salaried jobs.

The cuts came in addition to 13,000 layoffs Chrysler announced last February, including 11,000 hourly and 2,000 salaried workers. Around 6,400 hourly workers had left the company under than program as of June, Tinson said, but additional retirement packages could be rolled out under that program, which was scheduled to run through 2009.

Employees have until Feb. 18 to decide whether to take the latest offers. Some workers could leave by April, but the dates they will leave the company will vary by worker and by plant.

Under Chrysler's current offer, employees who are on temporary or indefinite layoff or have at least one year of service can get up to $100,000 and six months of health benefits if they agree to cut ties with the company. Retirement-eligible employees can get a $70,000 lump-sum payment as an incentive to retire with a regular pension. A separate program gives workers close to retirement their full benefits if they retire early, but they get no lump-sum payment.

Ford Motor Co. and General Motors Corp. are offering similar buyouts and early retirement packages to cut costs and reduce production capacity to match sagging U.S. demand.

On Thursday, Ford announced it will offer buyouts to all of its 54,000 UAW-represented employees. Ford is offering workers up to $140,000 to sever ties with the company, or incentives of $50,000 for nonskilled workers and $70,000 for skilled workers of retirement age. Ford said workers will begin leaving the company in April.

GM has offered early retirement packages and buyouts to 5,200 UAW hourly workers at service and parts operations but has yet to make similar offers to workers in assembly and parts plants. GM is close to agreeing with the UAW on the second round of buyouts and hopes to announce details next month, GM spokesman Dan Flores said. Once the second round is announced, the buyouts are expected to cover 46,000 workers. In the first round, GM is offering workers $140,000 to sever ties with the company and a $35,000 lump-sum bonus for retirement-eligible workers.