DaimlerChrysler plans to cut 10,000 jobs

DaimlerChrysler expected to cut 10,000 workers 16 percent of its total workforce and close up to three North American factories. Workers expected to get redundancy notice on Valentine’s Day as it is considering a part of a wider strategic review called Project X by the management. German-American carmaker takes this step as it lost $1.5 billion in third quarter which is above than Wall Street expectations. Chrysler earned $1.8 billion of profits in 2005, but rapidly augmentations in the petrol prices slumps the sales of its gas gulfed trademark trucks and SUVs and with other American carmakers lost its market to more efficient Asian producers. All the U.S companies are suffering by high employment costs, which include high union rates of hourly pay, big pension liabilities and massive healthcare contracts. Although DaimlerChrysler declined to comment on the expected redundancies, but insiders speculate that cut could inundates ‘between’ 8,000 to 10,000 people and buyout packages could be $100,000 an employee, for a total cost of about $1 billion. The Chrysler Group has 62,300 US employees, about 26,000 of them in the Detroit area. Project X is not the only restructuring plan which has affected Chrysler. In 2001 the company announced to eliminate 26,000 jobs. Since then it has redundant 40,000 and closed 16 factories.