In July, Chrysler announced it was eliminating the salaried positions as part of a cost-savings effort in response to declining sales volumes. The elimination of the contract jobs are part of that overall effort, people familiar with the plans said.
"Chrysler does not disclose specifics related to on-site contract workers," Shawn Morgan, a Chrysler spokeswoman, said in an e-mail.
The Auburn Hills automaker's sales are down more than 20% so far this year, and the company has been taking dramatic steps to turn itself around.
Over the past two years, the automaker has announced it wants to eliminate around as many as 28,000 jobs. That figure includes about 1,000 contract jobs cut as part of a decision announced last November.
Chrysler has also taken out 1.1 million units of capacity, announced it was closing its St. Louis-area minivan plant and Delaware SUV plant, and eliminated four products to help make the automaker a smaller, more efficient company.
Earlier this year, Chrysler implemented a 5% rate reduction on certain types of indirect supplier contracts, which impacted most agreements with agencies providing contract workers to the automaker.
The Free Press reported that some contract workers were seeing a direct result in the form of pay reductions.
Detroit's auto industry is filled with contract workers. When times get tough, such workers are often let go or see their pay cut.