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Chrysler salaried buyouts to include 3 months' pay

DaimlerChrysler AG's Chrysler will offer some older employees three months' pay if they leave the company by May 31, in the first round of incentives to trim the US unit's salaried workforce. DaimlerChrysler selective on Chrysler information.

A second group of younger workers will be offered full medical coverage and no additional benefits if they leave by June 30, the Auburn Hills, Michigan-based unit told employees yesterday. Chrysler wants to trim 1,000 salaried positions by June 30 and another 1,000 by the end of next year. They are part of a reduction of 13,000 jobs, or 16% of its total, after the unit's $1.5 billion loss last year. Chrysler's sales and market share fell in 2006, as Toyota Motor Corp. passed DaimlerChrysler as third in the US. „It is a necessary move but the two to three months before they leave is a lot of time for the ax to be hanging over someone's head, and morale could suffer,” Rebecca Lindland, an analyst at Lexington, Massachusetts-based Global Insight Inc., said in an interview. Kevin McCormick, a Chrysler spokesman, said the automaker sought to give employees considering the offers enough time to talk with their families and evaluate their finances. „We want to give them the opportunity to take it all in,” he said.

The Chrysler offers disclosed yesterday also call for workers who are 62 or older and have 10 years of experience to get $20,000 toward a new car or a health-care savings account. Normally, a worker is eligible for full medical retirement benefits at age 60 with 30 years experience, the automaker said. Those offers will be made between May 7 and May 31. The second group includes workers ages 53 to 61 who are paid less than $100,000 or workers 55 to 61 who earn more than that amount and have more than 10 years of service. Those employees will be eligible for retiree medical benefits and no additional incentives. They will receive offers from June 4 to June 29. Chrysler has 18,602 salaried employees in the US. Last week, Chrysler and the Canadian Auto Workers agreed on incentives of as much as C$100,000 ($86,000) for the union's members to leave the company. Those offers are aimed at workers at assembly plants in Windsor and Brampton, Ontario, and the Etobicoke casting facility in the same province. Chrysler wants to trim 2,000 union jobs in Canada.

General Motors Corp., the world's largest carmaker, and DaimlerChrysler are discussing several options, including joint development of vehicles and an outright purchase of Chrysler, people with knowledge of the talks said last week. News of those discussions prompted Chrysler CEO Tom LaSorda to urge employees to focus on the automaker's restructuring instead of speculation the company may be sold. „We have an obligation to each other, to our shareholders, to our dealers and to our customers to make this plan successful,” LaSorda said in an e-mail. „Your support and best effort have never been more important.”

DaimlerChrysler AG said it will be selective in sharing financial information with potential purchasers of its US Chrysler unit. The German automaker plans to vet candidates through investment bank JPMorgan Chase & Co. instead of giving out information to any interested buyer, Chrysler spokesman Jason Vines said late yesterday. DaimlerChrysler CEO Dieter Zetsche said February 14 all options are „on the table” when it comes to the future of Chrysler, which lost $1.5 billion last year. Zetsche said he wouldn't rule out a sale of the No. 3 US automaker, which he led for five years through mid-2005.

US shares of Stuttgart-based DaimlerChrysler rose 94 cents to $70.92 at 4:18 p.m. in New York Stock Exchange composite trading. They have gained 15% this year. (Bloomberg)