Black Friday Begins: Chrysler Cuts 25% of White Collar Jobs [Text of Letter Below]

Robert Farago
by Robert Farago

The Wall Street Journal [sub] reports that there’s blood on the carpet in Auburn Hills, as ChyrCo CEO “Boot ‘Em Bob” Nardelli lives up to his TTAC nic. The announcement came in the form of a Dear John letter. “Chief Executive Robert Nardelli said the cuts are necessary because of the deep downturn in the economy and the tightening credit situation, which are choking off auto sales. Mr. Nardelli said the company is facing the ‘most difficult economic period any of us can remember.'” (Bob was speaking professionally, of course.) So, let’;s count the carnage, shall we? One thousand white collar workers were terminated at the end of September. The new cuts are on top of those cuts, which should eliminate another five thousand non-unionized employees. “The employees whose jobs are being eliminated will leave the company payroll Dec. 31, Mr. Nardelli said in the letter. An unspecified number of the 5,000 employees will be offered early retirement or buyout packages. Others will be terminated involuntarily. Those affected will be notified between Oct. 24 and Nov. 5.” Will the last Chrysler employee please turn off the lights? Meanwhile, here’s Bob’s letter…

Dear Employees,These are truly unimaginable times for our industry. We continue to be in the most difficult economic period any of us can remember. The combination of troubled financial markets, difficult credit, volatile commodity prices, the housing crisis and declining consumer confidence continues to weigh on the economy. Never before have auto industry sales contracted at such a fast rate. Throughout this challenging time for our industry and our company, we have continued to face the realities of our business environment. Working as a team, we have been right-sizing our organization to become as competitive as possible.As business conditions today continue to decline, and we prepare for economic challenges extending into 2009, additional actions will be needed to re-size our company to remain competitive. Due to the unprecedented conditions in the auto industry, both in our home and international markets, we are targeting a 25 percent reduction in our salaried and supplemental work force. As always, we will strive to do this in a socially responsible way, with respect and gratitude to those who have contributed so much to our company over the years.Your leadership team will receive the details on new voluntary programs today that will be made available to Chrysler salaried employees beginning in November. These new programs will be available to a broader group than before and will feature enhanced benefits, including both cash and new-vehicle vouchers. Your management will share all the program details with you in the next few days. I hope that every eligible employee takes time to seriously consider these enhanced offerings given the current environment. In addition, it will be necessary to have involuntary separation actions at the end of December, which is why the company is also issuing a WARN act notice today.We need to work harder and more diligently to control every expense. To that end, we are eliminating in some cases, and cutting back on all discretionary and overhead expenses. Details of this initiative will be communicated through your leadership team. As an additional cost savings measure, we also will be reducing capital expenditures, but I assure you that we are protecting all major product programs.As we re-size the company to reflect declines in volume, we know we must find new and more efficient ways to conduct our business operations. We recognize that in order to strengthen our competitive capability, and reduce the time and cost to achieve our objectives, we cannot operate as we have in the past. In the near future, we will be making organizational announcements as a result of restructuring actions reflecting the need to find new ways to operate, while still recognizing the importance of focusing on the customer, a relentless commitment to quality and investing in the programs that we need to compete in the marketplace.I realize the appetite to know what the future holds for Chrysler is tremendous. Media speculation about our fate continues to be rampant. As a matter of company policy, Chrysler does not confirm or disclose the nature of its business meetings, in many cases to comply with legal requirements, as well as protect the integrity of our Company and those with whom we meet. When erroneous reports can be corrected with definitive answers, I support dealing with these issues in a clear and direct manner. I want to assure you that your leadership team is committed to communicating fully and directly to you if, and when, there is something to announce.The Chrysler team has been through tremendous change over the years through the many ups and downs of this industry. During these tumultuous times, I encourage you to help each other to keep a sharp focus on the important tasks at hand.Thank you for your continued dedication.Bob
Robert Farago
Robert Farago

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  • Menno Menno on Oct 24, 2008

    Well, 2hard4u, who's to say that the layoffs aren't permanent, if Cerberus can't do a deal to offload Chrysler? See the link in my comment above yours.

  • Redbarchetta Redbarchetta on Oct 24, 2008

    Menno that is an interesting theory and I would think it might be possible except for the bailout money from Uncle Sam. If they kill all their US production how on earth can the government justify giving them a penny. Or does the new GMC company get what both companies would have gotten individually and they just count GM US production in the total of both. Damn that makes your theory a lot more possible since our government can't really be trusted with our money.

  • FreedMike Off topic, but folks, this site is not working well for me from a technical standpoint, and it doesn't matter if I'm using my phone, or my computer (on two different browsers). It locks up and makes it impossible to type anything in after a certain point. Anyone else having these issues?
  • Syke Kinda liked the '57, hated the '58. Then again, I hated the entire '58 GM line except for the Chevrolet. Which I liked better than the '57's. Still remember dad's '58 Impala hardtop, in the silver blue that was used as the main advertising color.
  • Dartdude The bottom line is that in the new America coming the elites don't want you and me to own cars. They are going to make building cars so expensive that the will only be for the very rich and connected. You will eat bugs and ride the bus and live in a 500sq-ft. apartment and like it. HUD wants to quit giving federal for any development for single family homes and don't be surprised that FHA aren't going to give loans for single family homes in the very near future.
  • Ravenuer The rear view of the Eldo coupe makes it look fat!
  • FreedMike This is before Cadillac styling went full scale nutty...and not particularly attractive, in my opinion.
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