Chrysler to cut 13,000 jobs

AUBURN HILLS, Mich. — There wasn’t much love in the message from DaimlerChrysler AG to its struggling North American operations:

Chrysler, you’re a drag on our profits. We might sell you, or at least find you another partner. Oh, and you need to close a plant and shed 13,000 employees, about 16 percent of your global work force.

In announcing a wrenching restructuring plan on Wednesday, DaimlerChrysler Chairman Dieter Zetsche hinted that the 1998 marriage between the German parent and the ailing U.S. operations could come to an end.

He said the company is looking at all options including partners for the troubled Chrysler, and he wouldn’t rule out a possible sale.

“I cannot and will not go into any further detail about the announcement we made today,” he said under repeated questions from reporters about potential buyers or partners for Chrysler.

“In this regard we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler,” Zetsche said.

The job cuts – while not as drastic as in 2001 when Chrysler shed 40,000 employees with layoffs and the sale of parts plants – were blows to communities in several U.S. and Canadian cities. Hardest hit was Newark, Del., where the company said it will close a plant with 2,100 workers that makes the slow-selling Dodge Durango and Chrysler Aspen midsized sport utility vehicles.

Dean Almuwalld, an assembly line worker who has been at the plant for 13 years, learned its future from news reports.

“I’ll take a transfer,” the 33-year-old said as he walked into the local United Auto Workers hall. Almuwalld said he has relatives in Detroit. “I’ve got family there, so I’m ready to go.”

With Wednesday’s announcement, the domestic auto industry has eliminated or proposed cutting 132,000 manufacturing jobs at 64 U.S. plants since May 2005, said Sean McAlinden, chief economist and vice president of research at the nonprofit Center for Automotive Research in Ann Arbor.

The devastation was partially offset by overseas brands expanding their manufacturing operations in the U.S. During that same period, foreign brands, such as Japan’s Toyota Motor Corp., and their suppliers have created 30,000 to 40,000 factory jobs in the U.S. That should rise to 50,000 to 60,000 by 2009, McAlinden said.

Chrysler announced its long-awaited plan at its Auburn Hills headquarters, saying it hoped the move would return its U.S. operations to profitability by next year. Like the other domestic automakers – Ford Motor Co. and General Motors Corp. – DaimlerChrysler’s earnings have been hit hard by rising labor costs and slumping sales as consumers have turned to foreign models. For years, the so-called Big Three pinned their fortunes on higher-priced sport utility vehicles and trucks, but that strategy soured when gas prices climbed to near $3 a gallon.

Besides closing the Delaware plant, the company said it would reduce shifts at plants in Warren, Mich., and St. Louis. A parts distribution center near Cleveland also will be closed, and reductions could occur at other plants that make components for those facilities.

Under the plan, 11,000 production workers – 9,000 in the U.S. and 2,000 in Canada – will lose their jobs during the next three years, and 2,000 salaried jobs also will be cut during the next two years.

“Today’s action by DaimlerChrysler is devastating news for thousands of workers, their families and their communities,” United Auto Workers President Ron Gettelfinger and Vice President General Holiefield said in a joint statement.

Zetsche and Chrysler Chief Executive Tom LaSorda said they are aware of the pain caused by the restructuring, but Zetsche said it will make Chrysler stronger in the future for all employees.

DaimlerChrysler shares rose $5.33, or 8.3 percent, to close at $69.78 on the New York Stock Exchange.