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Detroit 3 to UAW: The Bosses Feel Your Pain. Honest.

July 23rd, 2008 @ 6:09 pm

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Tags: Job, Compensation, UAW, Chrysler LLC, Recruitment & Selection, Benefits, Human Resources, Workforce Management, Jim Henry

dodge_grand_caravanIn what’s getting to be the “Death of 1,000 Cuts” in the auto industry, Chrysler was widely reported today to be cutting 1,000 white-collar jobs, on top of previously announced production cuts, layoffs and job cuts.

The way it often works in Detroit is that when blue-collar jobs are cut, white-collar job cuts aren’t far behind. The car companies are sensitive to any suggestion that salaried workers, who are not represented by the UAW, aren’t sharing the pain with the hourly workers, who are.

It also makes you wonder whether things continue to go “according to plan,” as Chrysler’s Jim Press said earlier this month.

According to Bloomberg, Chrysler since February 2007 has announced 28,500 job cuts, including today’s announcement. Last month, Chrysler said it will indefinitely idle one of two plants that make its redesigned 2008 minivans, starting Oct. 31; cut from two shifts to one, at one of three plants that build the Dodge Ram pickup; and cut 2,400 hourly jobs.

Most of the cuts will be reached through attrition and buy-outs, but if all else fails, involuntary terminations are an option.

To be fair, Chrysler’s rivals General Motors and Ford are taking similar actions, as $4 gas has torpedoed sales of the Detroit 3’s bread-and-butter pickups and SUVs this year. (Even Toyota, Honda and Nissan have cut back, some.)

Last week, at the same time GM announced measures to raise $15 billion, including possible asset sales, the company said it was eliminating health care benefits for white-collar retirees over 65, and eliminating annual executive cash bonuses.

“For the company’s top executive officers, (that) represents a reduction in their cash compensation opportunity of 75 to 84 percent,” the company said. That can’t be pleasant. And stock-based compensation for executives probably isn’t worth what it used to be, either. But you sort of assume the top executive officers are not hurting too badly financially.

Jim Henry has been writing about the auto industry from a business perspective for more than 20 years. He is also a member and past president of the New York-based International Motor Press Association.

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Jim Henry

Based in the New York metro region, Jim Henry is a veteran reporter with more than 20 years experience covering the auto industry for publications such as Automotive News. He was also department manager, corporate strategy and market research, for Mercedes-Benz USA, the German automaker's U.S. sales and marketing subsidiary. Jim is a board member and past president of the International Motor Press Association. more »

AboutAuto Industry

BNET Automotive provides daily industry news coverage and insights for managers and executives, focusing on the major automotive and part manufacturers. In addition to detailed company profiles, we bring you critical analysis on new alliances and partnerships, new products, mergers and acquisitions, labor and cost management, investments and deal flow, and a host of other important business issues.

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