As promised in an email last week, Chrysler has now sent affected workers details of job termination programmes which offer lump sum payouts of up to $US100,000.
The programmes include an Incentive Programme for Retirement (IPR) with a $US70,000 cash lump sum for employees with 30 or more years of service, or who meet a combination of age and years-of-service eligibility, and an Enhanced Voluntary Termination of Employment Programme (VTEP), which provides a lump sum payment of $100,000 for employees with at least one year of service.
The automaker and the United Auto Workers union (UAW), which represents most of Chrysler’s hourly paid workers, have agreed to the two programmes that will provide “retirement and separation incentives” for employees in the United States as part of the company’s “recovery and transformation plan”.
A letter outlining the details was sent to affected employees on 27 February, Chrysler said.
The letters followed an email to employees last Thursday from Chrysler president and CEO Tom La Sorda who said then that the offers were just days away.
La Sorda encouraged Chrysler employees “to produce great cars and trucks, to take care of our customers and to restore profitability”.
He also stressed the importance of the recovery plan, saying: “Whatever fork in the road we may take, we first have to make sure we’re on the road – and the recovery and transformation plan is that road. The plan is designed to make us profitable by 2008 and put us on solid footing to stay there.”
The three-year restructuring plan announced on 14 February – after Chrysler posted an operating loss of $1,475m in 2006, compared with an operating profit of $2,024m in 2005 – will cut annual output by 400,000 units by closing an assembly plant within three years and cutting shifts at other plants, with the ultimate loss of 11,000 hourly-paid jobs.
Chrysler will also “reduce and optimise” its dealer network and outsource non-core activities, axing a further 2,000 salaried posts.