United Auto Workers Union leaders said yesterday that they expected DaimlerChrysler to eliminate nearly one-third of workers at its older Toledo, Ohio, Jeep factory following the opening of the new highly automated Liberty assembly plant nearby, Associated Press reported.

About 1,700 of 5,300 Jeep jobs will go, the report said, adding that DaimlerChrysler had warned two months ago that it might axe as many as 2,000 posts.

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"The impact is going to be less than we thought," Nick Vuich, the chairman of the United Auto Workers Local 12 branch at the assembly plant, told AP.

AP said that the cuts were being made because Jeep is ending production of the Cherokee - a model first launched in 1983 - this month and also cutting Wrangler output.

The new plant nearby builds the Jeep Liberty SUV replacement for the Cherokee.

About 650 workers will be offered early retirement packages, Vuich told AP, adding that about half were expected to accept. The cuts also include 600 temporary workers.

Axed workers covered by the UAW will receive 95 percent of their regular pay until the end of their four-year contract, which runs into next year, AP said.


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AP said that Toledo workers began building the Jeep, which was originally designed for the military, in 1941. Nearly all of DaimlerChrysler's Wranglers and Cherokees are built in the city.

The number of remaining Jeep workers is less than the number the company promised four years ago when the city and state convinced DaimlerChrysler to build a second assembly plant in Toledo.

At the time, DaimlerChrysler said it would keep 4,900 Jeep jobs in the city and, in return, received free land as part of an incentive package worth about $US280 million -- at the time one of the most lucrative packages ever given to a corporation, AP said.

Toledo mayor Carty Finkbeiner, who negotiated the Jeep deal, has threatened to cancel some of the tax breaks DaimlerChrysler currently enjoys if the job cuts drop below the original number, AP added.

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