Autoblog

Project X has now officially been renamed the Recovery and Transformation plan by the Chrysler Group, which plans to reduce its workforce by 13,000 people between now and 2009. About 11,000 employees will be hourly workers, while 2,000 will be salaried employees. In addition, total production capacity for the Chrysler Group will be reduced by 400,000 units per year, aided by the immediate elimination of shifts at its Newark Assembly Plant and Warren Truck Plant, along with cancelling a shift at its St. Louis South Assembly Plant in 2008. In 2009, the Newark Assembly Plant will be completely idled. There's also the standard restructuring moves you'd expect in the plan, like reducing the number of dealers, selling less to fleets, and offering retirement and attrition packages to current workers not affected by the layoffs.

Chrysler Group hopes the R&T plan will return the company to profitability as early as 2008. It's main weapon is cost reduction by the aforementioned layoffs and plant closings. The idea seems to be that if the company can reduce costs enough, its operating profit can offset the quarterly losses it will be facing in the near term.

It's not all slash and cut though, as Chrysler also announced a $3 billion investment in new engines, transmissions and axles that will focus on producing more fuel efficient power and drivetrains. One such product will be a dual-clutch transmission it's commissioned Getrag to produce and a new V6 engine dubbed "Phoenix". There's a slew of BLUETEC diesel vehicles on the horizon, and the 2008 Dodge Durango will host the company's first two-mode hybrid, as well.

One item of note in the press release issued is DaimlerChrysler CEO Dieter Zetsche's statement that, "we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler," which some analysts have taken to mean that selling off the Chrysler Group wholesale is still on the table as a viable option.

Check out the Chrysler Group's full press release after the jump for all the nitty gritty details, and let us know in the comments whether or not you think the Recovery and Transformation plan has what it takes to turn Chrysler around.

[Source: Chrysler Group]