Chrysler's First Group of Salaried Workers To Leave Friday

DETROIT -(Dow Jones)- Chrysler LLC's first group of salaried workers who chose to take buyout offers will leave the company Friday as the auto maker keeps pace with its plan to shed as many as 12,000 jobs by April.

White-collared workers, 62 years of age or older and with 10 or more years of service, were offered three months of pay and a $20,000 voucher to leave by the end of the month, Chrysler spokesman David Elshoff said. A second round of buyouts, aimed at workers at least 53 years old and with 10 or more years of service, starts Friday. They will leave Dec. 31.

Chrysler announced Nov. 1 it would cut 1,000 salaried workers, 37% of its contract employees and between 8,000 and 10,000 hourly workers as it works to return to profitability and adjust to a forecasted slump in North American auto sales. The company has been moving aggressively to restructure its operations since being acquired by Cerberus Capital Management LP in August.

The auto maker didn't release the number of salaried workers who took the first round of buyout offers, Elshoff said. Those who participate in the second round will receive early retirement benefits only.

The contract workforce reduction is also proceeding with groups of people leaving each month, Elshoff said. Chrysler employs about 3,000 contract workers who handle everything from engineering to marketing.

Manufacturing cuts are slated to begin and end in the first quarter of 2008, Elshoff said.

In an Internet broadcast to employees Monday, Chrysler Chief Executive Officer Bob Nardelli said these reductions were needed to prepare the company for 2008 when overall North American auto industry sales are forecasted to drop below 16 million.

"We didn't want to be chasing costs throughout the year," he told employees. " We hope we were aggressive enough and if not, we will adjust."

All of the current cuts are in addition to the Auburn Hills, Michigan-based company's plan, announced in February, to trim as many as 13,000 workers over the next three years.