Chrysler plans further job cuts

The 25% cut in Chrysler's salaried workforce follows factory job losses

US car firm Chrysler is to cut about a quarter of its white collar workforce by the end of 2008, as it continues to cut costs.

The firm employs some 18,500 white collar workers in total.

To achieve the reduction, the car firm said it would aim for voluntary departures in November. A number of temporary positions will also be axed.

A day earlier the firm announced 1,825 manufacturing job cuts as the slowing economy hits demand.

These are truly unimaginable times for our industry Robert Nardelli, chief executive, Chrysler Peugeot to launch 'massive' cuts

On Thursday the firm said a factory in Newark will now close at the end of this year, a year earlier than anticipated, and one shift at Toledo North Assembly Plant will go.

Unimaginable times

Chief executive Robert Nardelli said the firm was finding "new ways to operate".

"These are truly unimaginable times for our industry," he said. "We continue to be in the most difficult economic period most of us can remember."

He also said there would be further restructuring and organisational changes.

The firm is to reduce all "discretionary and overhead expenses and reduce capital expenditures not connected to major product programs".

"It's likely that every facility Chrysler has around the world will be affected by these reductions," Chrysler spokesman David Elshoff told Agence France Presse after Friday's news.

The latest cuts "could represent up to 5,000" positions, he added.

Separately the automotive firm's owner, Cerberus Capital Management, is considering combining or selling the firm to another car firm.

Demand braked

Vehicle makers firms worldwide have been hit by slowing demand.

Consumers have increasingly been turning to smaller and more energy efficient vehicles as the price of oil has risen.

While oil prices have dropped sharply it is expected that demand will still continue to fall further.

Car firms Renault, Volkswagen and Fiat have all been hit by slowing demand.