Chrysler announces 13000 job cuts

For 13,000 Chrysler workers, Feb. 14 will now be known as the Valentine's Day massacre. On Wednesday, Chrysler announced its long-awaited restructuring, which included a 16% reduction in its work force, shift reductions, a plant closing and a surprise hint that the plan could lead to a DaimlerChrysler divorce. Chrysler's German parent, DaimlerChrysler AG, said it is looking at all options to revive its fortunes, including partners for the troubled Chrysler.

Chrysler blamed the wrenching restructuring on poor sales after a shift in consumer taste from SUVs and trucks to more fuel-efficient vehicles. With Chrysler's job losses, the domestic auto industry has eliminated or proposed cutting 132,000 manufacturing jobs at 64 U.S. plants since May 2005, said Sean McAlinden, chief economist and vice president of research at the nonprofit Center for Automotive Research. The job cuts at Chrysler will reduce by 400,000 the number of vehicles that operations can produce each year.

Like the other domestic automakers - Ford and General Motors - DaimlerChrysler's earnings have been hit hard by rising labor costs and slumping sales as consumers have turned to foreign models. For years, the so-called Big Three pinned their fortunes on higher-priced sport utility vehicles and trucks, but that strategy soured when gas prices climbed to near $3 a gallon.

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