Chrysler Cuts Jobs
November 20, 2007
An estimated 11,000 jobs will be cut by Chrysler Corp. The job cuts will take place in the United States and in Canada. The company reported that the cuts will be made up of 1,000 salaried jobs along with 10,000 hour-based jobs. Earlier this year, Chrysler announced that it would downsize an additional 13,000 jobs. When these numbers are viewed as a total, the cuts represent nearly thirty percent of the workforce employed by Chrysler.
Weak sales of Chrysler products are considered the main cause of the cuts. The company has been in financial trouble for months, and the company announced its first cuts in Feb of 2007. Analysts believed then that there would be more cuts, but they had not expected this level of layoffs.
The news is bad for Chrysler but other car makers are doing much better. For example, Toyota recently celebrated its fifty year mark into the U.S. car manufacturing market this month. According to reports, Toyota sold more vehicles in October of 2007 than competitor Ford. If trends continue, Toyota is set to become the number 2 car maker in the United States.
There are some valid reasons why Toyota is gaining strength in this market. Poor management and a lack of foresight on the part of American car makers has led to lost sales and increased costs. For example, in the year 2005, GM paid an estimated $2550 in pensions and health care for each automobile that it produced. Compare that to Toyota who spent $250 per automobile produced. By producing more fuel-efficient products, Toyota was able to capture the market for that type of vehicle which has become very popular in America.