Chrysler Group is to cut the rate paid to 3,200 contract workers by seven percent, according to the Detroit Free Press (DFP).
The ‘traditional’ American car companies and their top suppliers employ more than 20,000 contract workers, the vast majority in the Detroit area working jobs from secretary to engineer to product designer, the DFP added.
But Chrysler is not acting alone. According to the DFP, GM will axe hundreds of temporary workers from Friday, including designers, engineers and information-technology workers in Detroit, Pontiac and Flint. Several GM employees told the newspaper that some departments were getting rid of between 10 and 25 percent of their contract workers this week.
GM spokesman Tom Wickham told the DFP the move was part of a recently announced plan to axe 10 percent of its salaried and contract workforce this year but would not give numbers.
The DFP said that much of the recent round of motor industry job cuts have affected contract workers, many of whom have worked at vehicle makers or suppliers for several years in key engineering, design or administrative roles but aren’t technically full-time employees.
Layoffs are far more painful for contract employees because, unlike UAW members or full-time, white-collar employees, they usually don’t receive severance packages or other benefits, the DFP said.
“Unfortunately, these contract workers are viewed as disposable, people that can be gotten rid of more cheaply than other workers,” Scott Upham, a former contract worker at Ford and now president of Providata Automotive, an Ann Arbor consultant, told the Detroit Free Press.