The declining US market has led to Chrysler axing a further 1,000 salaried 'white collar' jobs after terminating 3,000 positions last year.

Chrysler last night told employees by staff memo it would terminate the 1,000 posts by the end of September.

"We're 'rightsizing' the company to reflect a significantly smaller market in 2008 and 2009 and position ourselves against what we see are continuing economic headwinds," spokesman David Elshoff told just-auto.

Chrysler sales fell 28.2% to 117,060 units last month as buyers shunned large pickup trucks and SUVs-  which make up about 70% of the automaker's volume - in favour of smaller, more fuel-efficient vehicles.

Earlier this month, Chrysler said it would idle a St Louis minivan plant and axe a shift at the nearby truck plant.

Its first half sales were off 22.3% to 864,880, the steepest drop of the Detroit Big Three - GM was down 16.3% to 1,589,865 and Ford sales fell 14% to 1,128,561.

Elshoff said the automaker hoped to avoid mandatory layoffs. "The goal is that they would all be voluntary. We will soon be introducing opportunities for eligible employees to take early retirements and other voluntary separation programmes."

He added that cuts would be company-wide and not determined by geographical or operational location.

Chrysler is now privately held and controlled by Cerberus Capital Management, and was reported earlier in US media to have said its liquidity position to the end of June had remained "unchanged" since December 2007 "as a result of aggressive programmes to reduce working capital, the sale of non-core assets and volume-related manufacturing reductions."

Chrysler was also reported to be axing some temporary jobs.

General Motors earlier this month announced wide-ranging cuts to improve its liquidity.

Even Toyota is not immune from the US downturn. It recently announced plans to make hybrid cars instead of SUVs at a new plant it is building in Mississippi and will rationalise large pickup truck production into one plant from two currently.