×

Chrysler Buyout Lures Quarter of Salaried Staff

For the last month, many of the conversations at Chrysler’s headquarters campus began with a simple but emotionally charged question: “Are you staying or going?”

The historic downsizing of the Detroit automakers has already eliminated more than 100,000 factory jobs over the last three years. But at Chrysler, the day before Thanksgiving was the moment of reckoning for endangered members of its white-collar work force.

Like General Motors and the Ford Motor , Chrysler is cutting deep into its white-collar ranks by offering buyouts or early retirement deals to managers, engineers, financial analysts and secretaries. The company is committed to reducing its salaried staff by 25 percent, or about 5,000 employees, by the end of the year.

On Wednesday, employees filed out of the headquarters complex either with a buyout in hand on what was their last day on the job — or on their way to a holiday weekend fraught with uncertainty about Chrysler’s future.

For the thousands who accepted a buyout or early retirement package, leaving Chrysler was hardly an easy choice.

“I’ve been through previous downturns, but there was always a light at the end of the tunnel,” said Jim Burns, who had worked for Chrysler since 1976. “This time I’m not seeing any progress. I couldn’t turn it down.”

Mr. Burns had been laid off in 1979 as Chrysler sought — and ultimately received — a federal bailout. Three years later, he turned down a more lucrative job and returned to Chrysler, where his father, sister and brother-in-law also worked.

“I never wanted to do anything other than automotive. I loved Chrysler — I still do,” said Mr. Burns, 54. “It was a great ride.”

Some of his colleagues elected to stay, turning down buyout offers worth up to $100,000 to remain part of the automaker’s fight to avoid bankruptcy.

Those who remain are about to be confronted with thousands of newly empty offices and cubicles, an inescapable reminder of both the wrenching cuts that Chrysler has made and the difficulty that lies ahead.

“They’re gambling that they’re going to find a job or something better,” said Jon Schwartz, 40, who elected to keep his job in logistics at Chrysler, where he has worked for 18 years.

“I think the bigger gamble might be staying, but I made my decision and I’m not looking back,” Mr. Schwartz said. “On Monday we’ll go in and see who is left.”

Though some workers have until Sunday to change their minds, it appears that Chrysler more or less reached its goal of persuading 5,000 white-collar workers to leave by Wednesday’s deadline. That amounts to roughly a quarter of a salaried and contract work force that has already been decimated by several years of deep cuts, including 1,000 jobs in September.

The company had said initially it would probably need to make some layoffs in December, but a Chrysler spokeswoman, Shawn Morgan, said on Friday, “We expect minimal if any involuntary separations in December.”

Chrysler has also been eliminating factory jobs as it tries to conserve cash and match its production capacity with sharply lower demand for vehicles. By the end of this year, Chrysler will have cut 32,000 jobs since the beginning of 2007, its chief executive, Robert L. Nardelli , told Congress this month.

Across town, G.M. and Ford have been drastically reducing their salaried and hourly payrolls as well. Both used buyout programs to cut tens of thousands of unionized assembly jobs in 2006 and 2008. More recently, G.M. eliminated about 5,100 white-collar jobs by Nov. 1 and has an additional 2,000 cuts planned. The company is also reducing benefits for its remaining white-collar workers and dropping health care coverage for retirees.

The reduction is a critical step toward ensuring the long-term survival of the carmakers, but at the same time the companies say they may not even last long enough for that to matter unless the government steps in quickly with financial assistance.

Executives from G.M., Ford and Chrysler are spending the holiday weekend assembling their revival plans for Congress, which refused their initial request for $25 billion in loans but will reconsider the matter over the next few weeks.

Without federal aid, G.M. and Chrysler have said they could soon run out of money, and industry specialists say one bankruptcy could cause the others to collapse, ultimately resulting in broad job losses.

On Wednesday night, hundreds of Chrysler employees jammed the Red Ox Tavern to celebrate their freedom from the beleaguered auto industry or to commiserate about the tough road ahead. Outside, rows of Dodge Calibers, Chrysler Sebrings and Jeep Grand Cherokees spilled into the snow-covered grass.

The buyout offer included a $75,000 payment to workers with at least 10 years of experience and $50,000 for those with less, plus a voucher worth $25,000 off a new Chrysler vehicle. Some former employees hope the money will be enough to live on until they can secure other work. Others are prepared to use the buyout money to cover the shortfall between their mortgage balance and the value of their home in Michigan’s depressed housing market, so they can sell and move to a state where jobs are more plentiful.

Those without a home to sell or family obligations keeping them in the Detroit area are almost certain to head elsewhere immediately.

“I figured I can take a chance. I’m 28, single — I can go wherever I want,” said Jessica Krul, who worked in purchasing at Chrysler for two years and turned in her buyout papers a week ago.

Katrina Harris, 37, who was born in Detroit and began working for Chrysler as a summer intern during college 14 years ago, wrestled with her decision to leave but is optimistic about making a fresh start outside the auto industry.

“Chrysler’s all I know,” she said. “I’m giving myself a year to kind of tread water, and I told my family I may have to move out of Michigan to find something.”

For some, Michigan’s miserable economy was a reason to stay at Chrysler, even knowing that they could eventually end up unemployed later on without a buyout payment to lean on.

“A week ago, I was 90 percent sure I would take it,” said Diane Pierse, 45, an information technology employee who is married and has two children, one of whom is in college. “But I figured if I don’t have another job I was better off collecting as many paychecks as I can and trying to hang on. There’s a lot of hard work ahead of us. But I want to ride it out and be here for when it turns around.”