Chrysler's Job And Model Cuts: What They Really Mean
As expected, Chrysler is wasting little time in downsizing both its work force and struggling line-up of vehicles. Today, the automaker announced it will cut another 8,500 to 10,000 jobs, including 1,000 white collar employees.
This round of downsizing is on top of the 13,000 job cuts announced earlier this year as part of the plan to get Chrysler back in the black. In both cases, weak sales are the reason for the reduction.
In addition, Chrysler is dropping four slow selling models. The Chrysler Pacifica, Crossfire, convertible PT Cruiser, and Dodge Magnum. The company will replace those models with the new Challenger, Dodge Journey (crossover utility vehicle) and two hybrids.
So what do you make of this news? As unfortunate as the cuts are for the 8,500 to 10,000 people who will lose jobs, this is a sign that an American automaker is doing what they've been unable or unwilling to do in the past: acting quickly.
Chairman and CEO Bob Nardelli and his President Jim Press realize Chrysler has too many workers and assembly shifts building too many vehicles in a market that is slow. When October sales come out later today, the industry will show another slow month. And that's unlikely to change before the end of the year.
Also, if a car like the Pacifica isn't selling, kill it. This is something the domestic automakers have been too slow to do in the past. Given the time and investment that goes in to a car, truck, or SUV,. automakers are often reluctant to drop models that don't work. Chrysler deserves kudos' for moving now to get rid of models like the Crossfire that are not selling.
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