The Chrysler Group has put on hold the buyout and early retirement packages for Detroit-area hourly workers after it was flooded with more interested people than it expected, the Free Press has learned.
Buyouts still are expected to go through, but the company is deciding on a plant-by-plant basis when workers can leave. Many expected to be out by early this month.
The hold-up is causing frustration for some who had expected to be done working at Chrysler -- but now can't move forward with plans, workers said. Amid all of the uncertainty about the Chrysler Group, morale has turned low and many thought it time to leave, workers said on the condition of anonymity.
"The company has informed the union that the amount of applications in the Detroit Labor Market Area (LMA) have exceeded their expectations," UAW Local 51 told workers in a recent notice. "As of May 2, 2007, all movement relative to the" buyout and retirement "packages is now on hold in the Detroit LMA."
In April, Chrysler reported that more than 1,600 Chrysler hourly workers in Michigan had signed up for the packages. A person familiar with the process said that 57% of the people eligible for the packages in Detroit accepted them.
The packages are part of the company's turnaround plan to reduce 13,000 employees, including a total of about 5,300 in Michigan, over the next three years.
The April announcement said that 4,312 hourly workers in Canada and the United States have accepted the packages -- about 1,500 shy of the company's goal for 2007.
On Monday, the company declined to give an updated number. "We did exceed our original projections," Chrysler spokeswoman Michele Tinson said. "We are still in the middle of the process. Each manufacturing location will determine when the accepted programs can be activated."
A spokesman for the UAW declined comment.
"The International Union and the company are in negotiations concerning how and/or when the members in the Detroit LMA will be released and backfilled," the notice to workers at the Mack Engine plant said.
The company had set an internal goal of May for people to leave the company but each facility has the discretion to decide when workers can be let go.
The company is shooting to get people out in a window that stretches from April 30 to June 30, but it could be longer if market demands warrant it, the Free Press learned.
Concerns about job cuts first emerged last fall when it became clear Chrysler was not doing so well.
The company, struggling with a truck-heavy lineup, posted a $1.5-billion operating loss in 2006, a figure that was revised to $680 million recently because of accounting changes.
On Feb. 14, Chrysler CEO Tom LaSorda announced the company's second turnaround plan in a decade but it was overshadowed by the indication that the division was up for sale.
In April, DaimlerChrysler chief executive Dieter Zetsche announced that the company was in talks with interested parties about Chrysler's future.
Several interested parties have emerged, most notably: two private equity firms, Blackstone Group and Cerberus Capital Management, and Canadian auto supplier Magna International Inc.
Experts have warned that a private equity firm would likely cut more jobs.
Not everyone was eligible for the buyout and early retirement packages. The company has set goals for each facility to reduce headcount.
The early retirement package includes a single payment of $70,000 and the buyout package includes a $100,000 lump sum.
When Ford Motor Co. offered UAW buyouts nationwide related to its turnaround plan, the take rate was about 45%. Among salaried employees, in some departments too many workers accepted buyouts but those conditional offers were rescinded.