One Fifth Of DaimlerChrysler Workforce To Go

In a radical reform of its loss-making operations, DaimlerChrysler (DCX) has announced that 26,000 jobs – one fifth of the company’s workforce – are to go over the next three years. 19,000 production line jobs will be lost, along with 5,000 white-collar jobs and 1,800 contract workers and DCX is hoping that the majority of losses will result from enhanced early retirement packages. The vast majority of job losses will be in North America, with another 2,600 resulting from the closure of facilities in Mexico and another 500 jobs lost in South America.

It is estimated that the cuts will save 1.4 bn Euro although experts predict the charge to cover restructuring costs could be as much as 3 bn Euro – this figure, together with expected savings, will be announced by DCX on 26th February. Vehicle production is to be cut by 17% (560,000 vehicles), with six factories closed (three in Mexico, two in South America and one in the USA) and a further seven working at reduced capacity.

DCX has also tried to reduce costs by telling suppliers to reduce parts costs by 5% this year and by 15% over the next three years. News of the job losses was announced by Dieter Zetsche, Chief Executive of Chrysler, who blamed fierce competition in North America, particularly from imported vehicles, and shrinking markets. .