DETROIT -- Chrysler LLC said yesterday that it would cut 1,000 salaried jobs worldwide by Sept. 30 as it tries to return to profitability amid a severe downturn in U.S. sales.
The automaker announced the cuts in a letter to employees. Chrysler spokesman David Elshoff said the company hoped that most of the cuts would be accomplished through early retirements, attrition and voluntary separation programs, but he said layoffs would be considered if the company fails to meet its targets.
"In light of an expected prolonging of the current market conditions, the company has made the difficult decision to revisit the current staffing levels in both its salaried and supplemental work force," Chrysler said in a statement.
Chrysler's U.S. sales fell 22 percent in the first six months of this year as customers shunned its trucks and sport utility vehicles in favor of smaller, more fuel-efficient cars. Industrywide U.S. sales were down 10 percent, but the decline hit Chrysler harder because trucks and SUVs make up 72 percent of the company's U.S. sales.
The cuts come on top of 3,000 white-collar cuts made last year. Chrysler also plans to cut some of its 2,700 temporary workers in the new round of layoffs, on top of the 1,100 temporary workers it cut in November. It didn't say how many temporary jobs would be cut.
Chrysler is the latest U.S. automaker to cut its salaried work force, as high gas prices and the weak economy continue to eat into U.S. sales. Ford Motor Co. has set a goal of cutting salaried costs by 15 percent by Aug. 1, while General Motors Corp. said last week that it planned to cut salaried costs in the United States and Canada by 20 percent. Ford and GM haven't said how many jobs would be affected, but it's expected to be several thousand at each company.
Chrysler's finances have been under wraps since it was bought last year by the private-equity company Cerberus Capital Management LP. But analysts consider the company the weakest of the Detroit Three in the current sales slump because of its dependence on the North American market and its heavy reliance on trucks and SUVs.
Chrysler had $9 billion in cash at the end of last year, according to JPMorgan auto analyst Himanshu Patel. Mr. Patel recently estimated the automaker would burn through $4 billion this year and could be forced to file for bankruptcy protection or sell off parts of its business in the second half of 2009 if industry conditions don't improve.
Chrysler said yesterday that its liquidity has remained unchanged since December because of aggressive reductions, asset sales and production cuts. Most recently, Chrysler announced in June that it would shutter its St. Louis South plant, which makes minivans, on Oct. 31, and would cut a shift at its St. Louis North plant, which makes pickups, in September. Those moves will affect 2,400 jobs.
"However, the signs of economic challenge continue for the U.S. market and as a result, further actions must be taken to improve our business and return to profitability," Chrysler said.