• Oct 24, 2008
"These are truly unimaginable times for our industry." That's how Chrysler CEO, Bob Nardelli, starts off a recent email to employees, just before dropping the bomb that the automaker intends to cut 25% of its salaried workforce beginning next month and continuing through the end of the year.

According to reports, Chrysler currently has 17,332 salaried workers, so 4,333 workers will be offered "voluntary" retirements and buyouts, while those who don't accept the automaker's offer, which includes "enhanced benefits" of cash and new vehicle vouchers, will be laid off. This is in addition to the 1,000 white-collar jobs Chrysler cut at the end of September.

Chrysler also plans to cut back on "all discretionary and overhead expenses and reduce capital expenditures not connected to major product programs." Nardelli admits that the company can't continue as it has in the past and that these tactics are an attempt to right-size the company to "reflect declines in volume." While we understand the trials and tribulations faced by Chrysler, Nardelli's email has a "this is going to hurt me more than you" ring to it. Judge for yourself after the jump.

Dear Employees,

These are truly unimaginable times for our industry. We continue to be in the most difficult economic period any of us can remember. The combination of troubled financial markets, difficult credit, volatile commodity prices, the housing crisis and declining consumer confidence continues to weigh on the economy. Never before have auto industry sales contracted at such a fast rate. Throughout this challenging time for our industry and our company, we have continued to face the realities of our business environment. Working as a team, we have been right-sizing our organization to become as competitive as possible.

As business conditions today continue to decline, and we prepare for economic challenges extending into 2009, additional actions will be needed to re-size our company to remain competitive. Due to the unprecedented conditions in the auto industry, both in our home and international markets, we are targeting a 25 percent reduction in our salaried and supplemental work force. As always, we will strive to do this in a socially responsible way, with respect and gratitude to those who have contributed so much to our company over the years.

Your leadership team will receive the details on new voluntary programs today that will be made available to Chrysler salaried employees beginning in November. These new programs will be available to a broader group than before and will feature enhanced benefits, including both cash and new-vehicle vouchers. Your management will share all the program details with you in the next few days. I hope that every eligible employee takes time to seriously consider these enhanced offerings given the current environment. In addition, it will be necessary to have involuntary separation actions at the end of December, which is why the company is also issuing a WARN act notice today.

We need to work harder and more diligently to control every expense. To that end, we are eliminating in some cases, and cutting back on all discretionary and overhead expenses. Details of this initiative will be communicated through your leadership team. As an additional cost savings measure, we also will be reducing capital expenditures, but I assure you that we are protecting all major product programs.

As we re-size the company to reflect declines in volume, we know we must find new and more efficient ways to conduct our business operations. We recognize that in order to strengthen our competitive capability, and reduce the time and cost to achieve our objectives, we cannot operate as we have in the past. In the near future, we will be making organizational announcements as a result of restructuring actions reflecting the need to find new ways to operate, while still recognizing the importance of focusing on the customer, a relentless commitment to quality and investing in the programs that we need to compete in the marketplace.

I realize the appetite to know what the future holds for Chrysler is tremendous. Media speculation about our fate continues to be rampant. As a matter of company policy, Chrysler does not confirm or disclose the nature of its business meetings, in many cases to comply with legal requirements, as well as protect the integrity of our Company and those with whom we meet. When erroneous reports can be corrected with definitive answers, I support dealing with these issues in a clear and direct manner. I want to assure you that your leadership team is committed to communicating fully and directly to you if, and when, there is something to announce.

The Chrysler team has been through tremendous change over the years through the many ups and downs of this industry. During these tumultuous times, I encourage you to help each other to keep a sharp focus on the important tasks at hand.

Thank you for your continued dedication.

Bob


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  • 42 Comments
      • 6 Years Ago
      I'm sure there's some way they can pin the blame on unions here....
      • 6 Years Ago
      >>> This is just one more layer of pain and suffering the company could do without. Unfortunately, it's become a sign of the times. It's becoming more and more commonplace to hear about employers having to pull out the knife and begin cutting staff. In some cases it's not a knife but a hatchet.

      I like Chrysler. And I surely do hope they find a way to survive.

      The automotive world just wouldn't be the same without them.
      • 6 Years Ago
      It is Armageddon out there...

      A 25% cut is huge for any company. A 10% cut for any one company would be huge. 25% is admission that Chrysler is not the company it once was and won't be able to build back to that. I guess so many years of selling mediocre volume product and low volume Halo cars will do that. I still don't understand how having a $80K Viper is supposed to help sell Sebrings. Maybe that is why I am not in marketing. The public sector sounds pretty good these days.
        • 6 Years Ago
        Building $90,000 & $100,000 Vipers had NOTHING to do with Chryslers bad fortunes. The V-10 motor went into trucks & marine projects. The Viper Comp. Coupes have been sold all over the world. Viper projects paid for themselves.

        Building too many trucks / SUVs & developing way too many "me-too", bland cars & trucks is what hurt them. The continued bad quality of these boring products also hurt... at least Chrysler/ Dodge & Jeep used to LOOK good with their piss-poor quality... now most are ugly & have piss-poor quality
      • 6 Years Ago
      The is like watching a person with terminal illness die slowly. Who want to write their eulogy?
        • 6 Years Ago
        Chrysler they will be remembered as a victim of sorts. High steel, prices, higher fuel prices, higher labor costs, a declining US economy and aged factories ultimately doomed them. Had these costs increased moderately they probably would have been pretty steady in the US. However, many companies had similar problems and able to adjust, For Now. The culpable parties if Chrysler fails or is bailed out will be the corporate leaders and the labor leaders who lacked the foresight to make Chrysler successful.
      • 6 Years Ago
      I wonder what percentage of the executives will be cut?
        • 6 Years Ago
        Jim Press the Forrest Gump of the automotive industry should be the first to go. I wonder how long it took Chrysler LLC to realize that he had no talent?
      • 6 Years Ago
      "Minimum Bob" Nardelli, clueless in Detroit.
      • 6 Years Ago
      Cutting 25%? I bet the union will be ticked off about that...



      oh wait.
      • 6 Years Ago
      It is brutal, but cutting your work force and downsizing is inevitable when you have decreased market share. It's not about being big, it's about being profitable.

      What is better? Producing 1 million cars and turn 15% profit, or build 5 million cars with no profit? Chrysler does not, and probably will not ever have the sales volume again. That doesn't mean they aren't a viable company, just not viable without downsizing.

      Is it the companies fault? Yes
      Is it the unions fault? Yes
      Is it societies fault? Yes (go ahead keep buying a new car every two years on credit).
      • 6 Years Ago
      Wow...
      • 6 Years Ago
      Unfortunately, Chrysler is circling the drain. Unless they find a buyer, Chrysler will be bankrupt within two years.
        • 6 Years Ago
        Perhaps. With GM and Ford not too far behind.
        • 6 Years Ago
        2 years? Maybe 2 weeks or 2 months. They don't have that much time.
        • 6 Years Ago
        Wake up Jared... bankrupt in 2 YEARS... like Tim said 2 WEEKS ... 2 MONTHS. You don't cut 25% of your staff & hope to make it 2 years.

        You cut 25% so GM or Nissan/ Renault don't have to do it! BTW, GM is spending 1 BILLION every month... they might make it to the end of 2009... 2 Years is a stretch even for them (if they don't stop the bleeding).
      • 6 Years Ago
      "These new programs will be available to a broader group than before and will feature enhanced benefits, including both cash and new-vehicle vouchers."

      Read: "As your ass leaves the building, do us a favor a take a Ram, Aspen or Durango with you".
      • 6 Years Ago
      Unfortunately for them, this is too little, too late.

      Chyrsler (at the time DCX) has been in trouble since '06. Ford and GM have been cutting head count and production for the last 18-24 months. Chrysler kept on running the factories and filling lots full of un-ordered vehicles.

      Chrysler has been denying they had any troubles the whole time. They were the media darlings which lead Cerberus to assume they were getting a deal from Daimler.

      Denial and slow reaction over the past 2 years is now their undoing (unless GM takes over). Then they (GM) will take what they need/like and sell the rest to bolster the coffers.

      Sad but true.
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