Chrysler offering buyouts up to $100,000 to hourly workers in Detroit
Seven months ago, so many Chrysler workers took up the offer of a buyout that the newly purchased pentastar slowed the whole process down while it sorted things out. To start 2008, the axe is back out again, with Chrysler working to reduce reduce its workforce by up to 12,000 people and offering more buyouts and early retirement packages to do it.
The latest round is aimed at the 12,000 workers at ten factories in the Detroit metro area: anyone with at least one year on the job is eligible to receive $100,000 not to show up to work any more. In addition, 110 UAW designers and engineers have been offered buyouts. Hourly UAW office workers and those at non-assembly plants outside of Detroit have not been offered buyouts yet.
While there are 4,600 people eligible for early retirement, which comes with long-term benefits that the buyout package doesn't offer, Chrysler doesn't know how many people will accept either offers. Previously, we suspected that the large turnout for a buyout was due to people "seeing the writing on the wall." Now that talk of a Cerberus flip seems to have settled down and the automaker appears to be making the right kinds of noises about plans for the future, the invitation might not get such a huge response this time.
[Source: Detroit News]
Reader Comments (Page 1 of 1)
Andrew 5:48PM (1/28/2008)
That's a nice chunk of change for hourly guys!
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whofan 6:03PM (1/28/2008)
I hope to see Chrysler come back as a strong company. Cerberus should have patience knowning it takes a good 4 years to see fuit of labor in the auto industry. I was really happy for Chrysler in the 90`s. Over night they were hurting and said they had to merge with Diamler Benz. I say somebody was duped. I wonder what Bob Eaton walked away with?$$$$$$$$$.
These buy outs I think are to take advantage of the new contract with the UAW. Rehire employees at a lower wage.
Chrysler builds some nice vehicles they just need a little work like interiors. They also made some bad moves like dropping the Neon and Plymouth brand.
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MemphisNET 6:51PM (1/28/2008)
The Caliber is an ok mini-cuv... but it's no Neon. As said above, it will take a few years to get going - the New RAM is a great start. Getting the Challenger out the door (regardless of its interior) is also a good move.
Now the bread & butter cars need to be fixed up. Looking forward to seeing the new Sebrings/Avengers.
J.Crew 6:31PM (1/28/2008)
1yr = $100,000!!
I would be sold and moving if that were me...
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iOrange 7:46PM (1/28/2008)
For the record I am a Chrysler employee.. I love Chrysler vehicles and am looking forward to the turn around Cerberus is working on to undo the effects of the company being run piss poorly by the Germans, we all know Chrysler was a benchmarked company during the 90's and early 2000's. I understand early retirement packages for the seasoned employees, but 100K for 1 year worth of work?? Offer 2 months pay, and say goodbye.. Seriously 100k x 1200 employees.. thats 120 MILLION! That is the next Viper, or a redesigned Avenger/Sebring... Why are we paying people this absurd amount of money to walk away? If they offered me 1/3 of that I would be back in school wrapping up my masters before the ink dried on the check. Lets keep the focus on "righting" the ship not offering golden parachutes to people with a YEAR of service!
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CompWizrd 7:55PM (1/28/2008)
Here's my thinking on what they're doing.
Lets say everyone takes the deal, even if they don't, the numbers still end up at the same proportions..
Chrysler goes ahead and pays out 1200 million in buyouts($12,000 x 100k).. borrow that from the bank, they pay what, 10% interest? so 120 million a year..
Now, they've got 12,000 workers they either don't have to pay their 100k a year in wages/benefits, and/or they hire new people at the new UAW contract rate of 20 dollars an hour less.. say 2500 hours with some overtime, you're looking at saving 50k a person times 12000 people.. 600 million bucks a year.. use some of that savings to pay down the money they borrowed, and they're well ahead. even more money if they don't have to replace some of these workers.
adfda asdfdas fdsa 1:33AM (1/29/2008)
BAD MOVE to take the cash right at the beginning of this recession.
These guys will not get another job nearly as good. That 100k will disappear pretty quick.
hold on to your job.
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Gary Lowe 2:41AM (1/29/2008)
Chrysler Corporation, winner of the "Woolworths of the 21st Century Award". I mean...other than it's nostalgic value what are they going to bring to the table that is different than a dozen other competitors? It's like AT&T, literally a ghost of itself that exists merely to exist.
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Used Cars 5:11AM (1/29/2008)
Would take it? I would not! I don't like Chrysler . . .
http://cars.ozfreeonline.com
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Justin 8:27AM (1/29/2008)
go to hell spammer
66coronet 6:02AM (1/29/2008)
It didn't have to come to this. They (Designers and management that approves it) did it to themselves.
1) MDS was proven successful in the 5.7L, why didn't they make smaller V-8's like 4.0L and 4.8L? Or even if there was a hint that V-6's could use MDS, jump on that idea back in the 1990's. A V-6 2.5L MDS would probably get better fuel mileage than the 1.8L world motor if tuned for torque. Plus be not so buzzy or sewing machine like. I'd drop the I-4 motor line in favor of a small smooth V-6 MDS. For tight engine compartments maybe move the spark plugs to the top like an old GMC.
2)PT cruiser sold better than expected. Why not expand on the design to make a family of vehicles and bring plymouth back to hold it under. PT pickup (one off the journey platform FWD, and one off the dakota platform) PT wagon (off the journey platform), pt cruiser (off the caliber platform).
3)2nd generation 1996-2004 dakota was the best looking dakota. Too bad they just had to try and make a fat fender vehicle edgy with the 3rd generation. For the future I hope they take the 2009 ram 1500 link suspension and scale it down to the dakota. Plus the 4th generation isn't bad looking except what's with the silver outline around the headlights. Body color it. Tail lights, need to get back to 2nd generation so we can after market the rams head. Or if they can do it from the factory with painting the lens from the inside, so much the better. Plus the 3.7L is hopefully going away in favor of a Phoenix MDS motor. It's the only way to get better fuel mileage and compete with a toyota tacoma. Hopefully a small V-6 for the cheeper 4x2 and larger V-6 for the 4x4 and premium 4x2.
4)Magnum wagon is going away. Why not try to sell the 300C wagon in it's replacement? Plus maybe for the heck of it, make the magnum a truck like a EL CAMINO. Couldn't be that expensive to re engineer. Most of the magnum tooling would be reused. 2.7L magnum truck would be a nice commuter and around the house light truck. 5.7L version a fast truck. Plus could be sold overseas with the MB3.0Lcrd like the 300C.
Lot's of other vehicles just needs a few minor changes to make them stand out and sell better. Interior make overs, better quality / feel + more storage areas by being imaginative. Plus drive train better fuel mileage and smooter. Small V-6 MDS + 2 mode hybrid might make the sebring/ avenger sell better. I still think the avenger should have use the name Dart.
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Car Designer 8:54AM (1/29/2008)
there are no Designers that are UAW...clay sculptors, yes, but designers, no. Trust me. Besides, Chrysler only has about 60 designers total, with many supporting sculptors.
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Mallory 1:03PM (1/29/2008)
Hmmm, _up to_ $100k to be unemployed with no healthcare today, or stay on and keep your $50k job for a few more years and maybe even ride it out. Worse comes to worse you're unemployed anyway.
I suppose if I already had some college and didn't already have a degree I could get that knocked out in a couple years and then start over at the bottom at some crappy, no-benefit, 60 hours a week s-hole company for $29k per year. Or I could go work at starbucks for $8/hour with all the other folks that have a BA from dirtweed college.
This whole starting over thing is great if you're 25 but kinda sux if you're 45 supporting a family. If I were in the latter group there's no way I'd give up a steady salary and the ability to take my kids to the doctor for a $100k lump sum that'll be who knows what after taxes. For those folks, the guaranteed $100k just guarantees that you're on your way to the poor house. At least if I keep my job there's hope that I won't be living on the street in 5 years.
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poizondoc 6:12AM (2/03/2008)
Let me just start by saying I am a Chrysler worker and signed up for the buyout. I signed for my own reasons. I have a plan I 've had since 96 when I started working for them. So with that said I got a 80% to 90% chance of being ok once I leave. I honestly can't say the same for most people who are taking this buyout. I 've heard some wild Ideas here and there trust me some of these workers should'nt even take it! If you take this money which is not $100.000 like everyone is saying it equals up to about $68,000 after taxes you better have a plan in place. You only get 6months of health care and no dental! So if you have kids you have to have a plan! Futhermore Chrylser is not being truthful! The truth of the matter is after this last contract which gave all the big 3 a two tier wage system and dumped billions of dollars in health care on to the UAW they have been trying to trim the fat so they can hire lower wage workers. The minute customers get back to buying cars again the Big 3 stands to make a Booty load of money! Just by them unloading health care and hiring workers at the two for one price! I am cutting my loses and running. The automobile industry is changing and the UAW is not what it use to be! If you have a plan thats worth its salt then I would be taking that money and getting as far away from the auto industry as possible! LOL!
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