Chrysler to cut 1,000 jobs; liquidity unchanged

By Poornima Gupta

DETROIT (Reuters) - Chrysler LLC said on Wednesday it plans to cut 1,000 white-collar jobs by the end of September to slash costs and survive a deep industry downturn.

The privately held automaker, controlled by Cerberus Capital Management, also said its liquidity position through June was unchanged from December "as a result of aggressive programs to reduce working capital, the sale of non-core assets, and volume-related manufacturing reductions."

Liquidity concerns for Chrysler have been rising as evidence grows that the downturn in U.S. auto sales that began earlier this year has accelerated in the face of record gas prices and a consumer defection from trucks and SUVs.

Chrysler, which lost $1.6 billion in 2007, has said it ended the year with $9 billion in cash.

Chrysler employees were informed of the latest job cuts through a staff memo sent by Nancy Rae, Chrysler's chief spokeswoman and head of human resources.

"To respond to the current market conditions, an incremental manpower reduction of 1,000 salaried employees by September 30, 2008, will be required," Rae said in the memo, according to a company spokesman.

The job cuts will be achieved through a combination of retirements, special programs and attrition, the company said.

Chrysler, pushing to turn around its operations nearly a year after being acquired by Cerberus, previously said it would close a minivan plant and eliminate one shift at a Dodge Ram truck plant in Missouri to cut excess capacity.

With U.S. auto sales at 15-year lows, Chrysler and larger rivals General Motors Corp and Ford Motor Co have been forced to expand restructuring plans.

GM detailed plans last week to slash costs by $10 billion through a number of steps, including white-collar job cuts, in a bid to shore up cash, while Ford is the midst of cutting its white-collar employee expenses by 15 percent.

(Reporting by Poornima Gupta, editing by Gerald E. McCormick and John Wallace)