Company seeks to cut only 4,700
June 8, 2007
Nearly 40% more U.S. hourly workers than planned have expressed interest in taking buyout and early retirement packages being offered by the Chrysler Group this year, the Free Press has learned.
About 6,400 U.S. hourly workers have told the company they would like to leave through the program being offered to reduce Chrysler's workforce as part of its turnaround plan announced in February. But the company is seeking to eliminate only 4,700 hourly U.S. workers this year.
Officials at the Auburn Hills-based automaker have said they were surprised by the number of people interested in the offers but have never publicly stated the total number of workers who expressed interest in the packages.
The packages, which for U.S. workers included payments of as much as $100,000 to leave the company, were targeted at facilities where the company wants to reduce head count this year.
While the company wants to eliminate 13,000 jobs during the next three years, the company's stated goal for 2007 was 5,900 hourly workers in Canada and United States.
In Canada, about 1,200 hourly workers have expressed interest in similar buyout and retirement packages -- about the number of jobs being eliminated there this year.
A spokesman for the company declined comment Thursday. In early May, Chrysler spokeswoman Michele Tinson acknowledged that the number of takers exceeded company's expectations, but she did not provide numbers.
The flood of interest has slowed departures from the company. UAW Local 51 in Detroit told workers in May that the packages were on hold because of the high interest.
Since then, workers at various plants say they've begun to hear how many people were being awarded the packages.
It's unclear at this point how many people will be granted the packages this year. It is likely to be more than originally planned, but not as many as who want them, according to people familiar with the company's thinking.
Several workers in the plants are frustrated with the slow process and complained about not being able to make the cut for a buyout or early retirement.
Catherine Madden, an industry analyst with Global Insight, said the high interest among workers suggests a growing skepticism among hourly workers about the direction of the auto industry.
"I can only say that there is some level of doom and gloom," she said.
Chrysler is not the only Detroit automaker to have seen high interest in buyouts. Both General Motors Corp. and Ford Motor Co. got plenty of takers for UAW buyout packages related to their turnaround plans. In some Ford white-collar departments, too may people accepted the conditional offers and were not allowed to take the incentives to leave the company.
David Cole, chairman of the Center for Automotive Research, attributes the demand to two factors: uncertainty over Chrysler's future and a belief among workers that a successful turnaround plan is important to their own futures.
"It works together. People take a buyout and they have a better chance of having health care in retirement," Cole said.
Chrysler lost $680 million last year.
The February turnaround plan that includes the incentives was largely overshadowed by DaimlerChrysler's decision to seek buyers for the American unit. Cerberus, which is putting $7.4 billion into Chrysler as part of its purchase, could complete the acquisition in July.