Chrysler exceeds buyout target for UAW workers

DETROIT, June 8, 2007; Reuters treported that Chrysler Group has exceeded its initial target for the number of factory workers willing to take buyouts to leave the automaker as part of a turnaround effort, a person familiar with the matter said on Friday.

About 6,400 hourly workers represented by the United Auto Workers union have said they were willing to leave Chrysler under terms extended in February, the person said.

That is almost 40 percent higher than Chrysler's job reduction target of 4,700 positions for this year and almost halfway to the company's stated goal of reducing 13,000 jobs over the next three years.

Chrysler, which is being acquired by Cerberus Capital Management in a $7.4 billion deal, had no comment. A spokesman for the United Auto Workers union could not be immediately reached for comment.

The unexpectedly high level of interest in the Chrysler buyout and early retirement offers has complicated planning efforts for the automaker as it considers how many acceptances it will process, the person familiar with the matter said.

The Chrysler buyout offers, which include payments of up to $100,000 for some workers, are patterned after offers already extended to UAW-represented workers at General Motors Corp. and Ford Motor Co.

Chrysler, which remains for now a unit of DaimlerChrysler AG, like its larger rivals faces a crucial round of contract talks with the UAW, beginning next month.

Taken together, the three struggling companies have cut more than 110,000 workers over the past three years and the automakers are expected to press for deep concessions in health care and other benefits.

On average, a UAW-represented hourly worker represents a labor cost of about $142,000 per year, including $79,000 in benefits, according to data compiled by the automakers.

Chrysler lost $680 million last year and has said it will remain unprofitable until 2008 as it restructures. Both Ford and GM are also being pressed by declining market share and high fixed costs.